Your landlord insures the property you’re living in, so do you also need renters insurance? Many tenants assume the homeowners insurance covers them when they move in, but it doesn’t. In fact, the insurance your landlord has covers only the property’s structure if something were to happen.
5 Reasons You Need Renters Insurance
1) Protect your belongings.
Most importantly, you need renters insurance because you need to protect your belongings.
Your possessions are not included in your landlord’s insurance policy. If, for example, the property was destroyed in a fire, the landlord would receive a check from the insurance company to compensate their loss. But without renters insurance, the value of your belongings is lost.
Or let’s say your items are in storage and someone breaks in and steals your expensive TV, tools, and computer. Without insurance, it’s up to you to financially replace the stolen goods. If you have renter’s insurance, you can file a police report and receive monetary compensation for your loss.
Liability insurance covers you for bodily injury and property damage caused by negligence. Without renters insurance, if someone slipped on your step or harmed themselves in any other way while on the property, they could sue you and you’d find yourself in oweing an impressive amount of money.
Or let’s say you left water running and flooded your home, leaving your flooring saturated and needing replaced or repaired. Renters insurance will help cover the financial repercussions of these simple, yet devastating, mistakes.
3) Loss of use.
Loss of use insurance generally covers expenses associated with an insured loss and is broken down into three categories.
- Additional living expenses. If a covered loss results in the residence being unlivable, renters insurance will cover any necessary increase in living expenses so you can maintain your normal standard of living. However, the insurance will only provide coverage for the least amount of time necessary to repair or replace the damage or, if the named insured has to permanently relocate, the least amount of time required for the household to settle at another location.
- Fair rental value. This pertains specifically to landlords and simply means that if the part of a property they are leasing is damaged and therefore not livable, the insurance will cover an appropriate value of the rental area.
- Prohibited use. Should a civil authority prohibit you from accessing your rental, your renters insurance will cover additional living expenses temporarily.
4) Your landlord might require it.
To mitigate a potential lawsuit and protect their deductible in the event the property gets damaged, your landlord might require that you have renters insurance. Don’t let this deter you from the rental. Just as it’s there to protect you, renters insurance provides protection for the homeowner as well.
5) It’s affordable.
Renters insurance is much more affordable than homeowners insurance. On average, most homeowners insurance costs around $100 a month, while rental insurance cost does not usually cost more than thirty dollars a month. When you think about a dollar amount to insure everything you own, thirty dollars is more than fair. In fact, most cable or internet plans cost more than renters insurance.
Whether you’re new to renting or a long-term renter, renters insurance simply makes sense.
By Danielle Keech