Even though renters insurance is affordable, helpful and sometimes required, most renters (and leasees) make the mistake of not buying a policy.
Renters insurance is for people living in a housing unit they don’t own. The landlord’s insurance covers the structure and their own things, like appliances already in the home.
This means that the renter doesn't have their personal possessions covered. All valuables destroyed in a disaster would be lost. Even the renter's living expenses during rebuilding would come out of their own pocket. This can happen even if the disaster was the owner's fault.
To protect against these risks, a renter should purchase renters insurance.
Renters insurance is cheaper than you may think. Most policies cost between $150 to $300 per year and cover up to $15,000 to $30,000 in lost goods. You can often choose to extend that coverage for an additional cost.
Like homeowners insurance, many item claims are limited to $1,000 each. To protect valuable objects like jewelry or computers, you can purchase “floater” policies for each item.
Renters insurance financially prepares you for a situation like a fire, theft, or structural collapse. It covers other related loss scenarios as well.
Personal liability is attached to a renters policy to protect from legal costs relating to negligence. If a guest hurts themselves in your home, you may be found liable. Similarly, if your dog bites a guest, they can sue you. These injuries and any related legal costs are covered by most renters insurance policies.
If a covered event makes your home unlivable, your renters policy helps cover additional living expenses. If a tree falls on the roof of a rented home, a renter without insurance is out of luck. The landlord has no obligation to pay for living expenses (or destroyed belongings) during construction. Standard renters policies pay for lodging and other related costs while the home is being rebuilt or repaired.
As always, there are many situations that aren't covered by renters insurance. The most common examples are certain types of natural disasters like flooding or earthquakes. Special policies can be purchased to cover these events on a case-by-case basis.
A major cause of denied claims stem from situations that fall under the landlord’s responsibility. For example, imagine that a hot water heater leaks, and your belongings suffer water damage. The landlord probably failed to keep up with regular maintenance, and the loss occurred as a direct result of their negligence. You may be able to file a claim under the landlord’s liability insurance in this instance.
If you have work from home, your renters insurance might not extend to your work belongings. If you filed a tax deduction for your home office computer, it's technically company property. That requires separate insurance coverage. If you work from home, double check with your insurance company to see if your stuff is covered.
A great feature of renters insurance is covering belongings outside the home. For example, if your cellphone is stolen while you're out and about, your renters insurance will probably cover it.
Certain exemptions always apply. Read your policy carefully and contact an insurance agent before leaving on a long trip.
Say there is a fire that only causes damage to one or two apartments in a building. However, the fire department opens all the units to make sure that there are no more people or pets left inside. Smoke billows into the apartment and causes damage.
Renters insurance can pay for the cleaning of all the personal belongings in this instance. Couches, clothing, and bedding can be restored for free, minus the deductible. The landlord would have to pay for the walls and counters to be cleaned separately. As one claims adjuster puts it: “If you could pick up the apartment and shake it, anything that falls to the floor, that’s what they [would] clean.”
Renters insurance is typically consistent and low cost. You can still save money by taking the following steps:
Insurance companies have millions of products and values in a database. Often, a video of belongings you want covered should be enough. If you want to hold on to every receipt, then do so. Just make sure to keep them in a fireproof safe!
Remember that you should document your personal inventory before a loss occurs. To make the claims process smoother down the road, write a list of your items and your assessed values in advance.
Keep in mind that instead of replacement costs, some insurers cover Actual Cash Value (ACV). Replacement value covers the cost to buy the item new, ACV takes payout based on depreciation.
Absolutely! Here's why:
Premiums are about $10 a month for coverage of $30,000 worth of belongings and liability. The amount of heartache a policy could prevent makes the cost well worth it.
Your landlord's policy covers the four walls around you but nothing in between. If you don't have renters insurance, you're out of luck if your stuff is damaged in a disaster or stolen in a burglary.
You may be surprised at the value of your possessions. There's a good chance you own at least $15,000 worth of furniture, electronics, musical instruments, and sports equipment. These items would be covered whether in your car, hotel room, suitcase, purse, or backpack.
Renters insurance also offers coverage for injuries people receive as your guest. A liability claim is unlikely, but you'll be glad you have it if you need it. Because of these benefits, renters insurance is a great product that can offer amazing return on investment.
Don't have renters insurance or think you're being charged too much? Get a quote and compare renters insurance rates to find the best policy at a price that doesn't bust your budget.
A: Technically your roommate could add you to their renters insurance. However, by having two people on the plan, you are doubling the amount of belongings. You may reach your coverage limits faster. It can get messy if one of you moves out- or worse- leaves on bad terms.
It’s easier to have your own renters insurance, especially because it’s so cheap!
A: No, you’re not required by law to have renters insurance. But many landlords do require it as a condition to signing the lease.
A: Anyone who has property they want to protect in case of theft, loss, or damage should get renters insurance. Even if you think your possessions don’t add up to much, think about your laptop, phone, television, jewelry, and clothing alone. Most people own more than $15,000 worth of goods!
Renters insurance also offers liability coverage. If anyone gets hurt in your apartment, you’re covered from medical and legal expenses.
A: Homeowners insurance and renters insurance are very similar. They have a key difference though: homeowners insurance covers the building itself as well as the possessions inside. Renters insurance primarily covers your possessions.
If you don’t own the building, renters insurance is the way to go.
A: Renters insurance is necessary if you want to protect your belongings from theft, loss, and damage. It also protects you from liability claims. Many landlords require renters insurance as a condition of signing the lease, so check with the homeowner if you are required to purchase it.
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