Renters insurance is far too often something people are either not aware of its existence or believe the cost is just excessive. Insurance in general is just a topic many folks don’t want to talk about until it’s too late. Buying insurance is something most people don’t think they need until a situation comes up where it is needed.
If you are renting a place to live there is a good chance you currently do not have renter’s insurance. According to the Insurance Institute, only 37 percent of renters carry it. For a renter that doesn’t have insurance, there are several reasons why you should.
Reasons Why You Need Renters Insurance
Personal Property Loss
Having renters insurance protects a policyholder from personal property loss. You might think your belongings are not worth much. However, the costs will add up fast if the home you are renting has for example a fire. The cost for things, such as televisions, clothing, and furniture, can add up quickly. It can be easy to reach a value of $10,000 to $20,000 or more in personal belongings quick.
You need to protect the loss of your personal property and this is a big reason to have renters insurance. Without it, you will need to come up with the money to replace your belongings on your own.
Liability
Most standard renter insurance policies have some liability protection. This covers a person in the event there is an injury in your home. Having liability insurance on a renters policy can cover any legal expenses or court judgments if someone does happen to get hurt. Many policies provide at least $100,000 of coverage and up to $5000 for medical costs. If this isn’t enough, there are typically higher limits for an increase in the cost of the policy.
Having liability insurance coverage is extremely important. You never know when someone might get hurt at your home. Even with a friend or relative medical costs can ruin a relationship. Fighting over having to pay for taking care of the costs for an accident will not be fun.
A renter with a pet especially should have some type of renters insurance. If you have a dog and it bites a person visiting you in your home, you might be sued to pay for medical costs out of pocket. The costs will be big. Having renters insurance can help with the liability of a dog bite.
Renters Insurance Might Be Required
Although not always a requirement, some landlords might require a tenant to have renters insurance. This might be a requirement of the landlord themselves or their own insurance company. A landlord that can get its renters to have their own insurance can transfer some of their liability to the renter.
Loss of Use
Having renters insurance can cover a person in the event there is a covered catastrophe and the renter doesn’t have a place to live temporarily. If the apartment you live in has fire damage, for example, you would need another place to temporarily live until your apartment is repaired. Loss of use coverage can help with a temporary hotel stay along with food. Without renters insurance that has loss of use coverage, you would be stuck paying any expenses if for some reason you can’t stay in your home for a temporary period.
Wealthy Renter
A wealthy person might have the money to self-insure in some instances should something happen. However, it can make sense to purchase an inexpensive renters policy to cover both liability and personal property damage. For renters that have expensive things in their home getting a renters policy can make a lot of sense.
Wealthy people also often have a target on them when it comes to frivolous lawsuits. Taking the chance of an injury in a rented home without insurance even by someone with a lot of money is not a good idea. Something like a dog bite that was mentioned above could easily turn into a lawsuit resulting in thousands of dollars.
You Can’t Control the People Around You
Living in something like a large apartment complex you are trusting your own judgment as well as all your neighbors. Just because you have the sense not to light a candle next to those extremely flammable curtains doesn’t mean your neighbor has the same common sense. The same can be said for even renting a house. You might have a close neighbor that really likes fireworks or building bonfires in the backyard.
Renters Insurance Misconceptions
With all the important reasons to have renters insurance, so many tenants fail to get any coverage. This is generally due to the numerous misconceptions when it comes to buying renters insurance.
Renters Insurance is Too Expensive
One of the biggest beliefs with tenants when it comes to renters insurance is that it will just be too costly. The truth is renters insurance is generally very inexpensive for most people. It can depend on the coverage and additional options. However, a basic policy with $30,000 in property loss and $100,000 in liability can often cost as little as just $20 per month. This is a small price to pay for having renters insurance coverage.
A few hundred dollars a year can add the protection of saving thousands of dollars.
I Don’t Need Renters Insurance
Another mistake when it comes to renters insurance is believing that you don’t need it. Some renters just don’t think they have much value in their belongings while others just refuse to think any type of accident can occur if they are cautious.
The cost of personal property can add up. An estimate by USAA puts most two-bedroom apartments at $20,000 of personal belongings. The cost of replacing furniture, clothing, and electronics can get expensive. Without proper insurance, the out of pocket cost to replace the items in an apartment can run tens of thousands of dollars.
My Landlord Has Insurance
Although many renters might believe their landlord has insurance that will cover personal property resulting from damage, this is only further from the truth. A landlord’s insurance is almost always only going to cover their own loss. This would include the building itself. Your belongings are not going to be covered.
When it comes to liability coverage, your landlord won’t be responsible for something like a dog bite. If you read the rental agreement you sign before moving in you will find that you often release much of any of your landlord’s liability. You will be liable for anything that happens to your visitors resulting from an accident.
Buying Renters Insurance
If you have read this article looking to learn more about renters insurance and you are ready to buy, there are some things to keep in mind to get the best policy and price.
Compare Pricing
When it comes to getting any type of insurance it can really pay to shop around. Get renter insurance quotes from some different companies to compare pricing. Ensure to look at the policy in detail to compare the benefits.
If you have life insurance or auto insurance with a certain company, ask if they offer renters insurance and if a discount is possible. Some insurance companies will discount pricing when bundling different types of coverage together.
Renters Insurance Claim
If you are renting a place to live, you really should have some type of renters policy for liability and your belongings. Insurance is one of those things that no one believes they need until they do need it. Keeping this in mind there is one important thing to remember with not only renters insurance but any insurance policy. Insurance companies are a business and they will look for any way to limit their financial exposure.
Even though you might have a renters insurance policy, it will be important to take a detailed inventory of all your belongings. List all the items you have and their value. For valuable things that have something like a serial number, record this in the event of theft.
If you unfortunately ever need to make a renters insurance claim for personal property loss, having a detailed record should make any claim much easier. Yet, you need to remember that most insurance claims are not going to cover the entire cost of brand-new belongings, but a depreciated value of those things.
Renters insurance is there to avoid the devasting cost of possible loss or liability just like any other type of insurance.
Final Word
If you are renting a place to live, you likely do need renters insurance. You might be under the belief that it is too expensive or your stuff just isn’t worth much. Even if all your own is the clothes on your back, accidents happen all the time. The protection of liability insurance alone can pay for itself with renters insurance should something happen.
With the average cost of renters insurance being only as much as $20 per month, a renter really can’t afford to not have coverage. Something like a fire or dog bite could be financially catastrophic without having renters insurance.
