Purchasing renters insurance can sometimes be overlooked as it isn’t legally required in any state. Still, some landlords may request that their tenants carry the coverage to protect the tenant’s personal property inside the residence. Many renters often incorrectly assume that their landlord’s residential insurance policy will cover their belongings after an accident such as theft or a fire.
If you are renting a property, it is in your best interest to ensure you carry renters insurance. Not entirely convinced? Here are five reasons why you should consider purchasing a renters insurance policy.
Key Takeaways:
- Renters insurance covers damage to your personal property both in and outside your home, up to your policy’s limits.
- If you are responsible for damage caused to another person or their property, your renters insurance liability coverage could help cover associated costs.
- According to the National Association of Insurance Commissioners, the average cost for renters insurance in 2020 was around $14 a month.
1. Renters Insurance Covers Damage to Personal Property
The primary reason for having a renters policy is to protect your personal property from unexpected events, also known as covered perils. Examples of common covered perils include vandalism, theft, fire, smoke damage, and natural disasters. Your personal property represents everything you own not attached to the property’s structure. Although your landlord does have insurance to protect their property, their insurance will only cover structural damage to the building and not your personal belongings.
Furthermore, your personal property also has coverage when it isn’t inside your residence. For example, let’s say you bike to work, and one day, you come out to find your bike missing. Even though the theft occurred outside your residence, you can still file a claim through your renters policy. First, you’ll need to settle your policy’s deductible, which is the amount of money you must pay out of pocket before your insurer steps in. Next, you must refer to your policy’s coverage limits to understand how much coverage your personal property has outside your home. If your bike is worth less than your coverage limit, you can file a claim to help replace it.
2. Renters Insurance Costs Less Than Other Coverage Types
A benefit of renters insurance is that it is relatively inexpensive compared to other insurance types. According to the National Association of Insurance Commissioners, the average cost for renters insurance in 2020 was around $14 a month. Although a renters policy is relatively affordable, your actual costs can vary depending on the coverage you need, your deductible, and where you live. Still, it may be possible to receive a discount by bundling two policies with the same insurer, such as your renters and auto insurance.
3. Renters Insurance Provides Liability Coverage
Like homeowners insurance, renters insurance also provides you with liability coverage. What does that mean? Let’s say you’re having a party, and a guest hurts themselves after falling. Without renters insurance, you could be responsible for any medical bills or lawsuits stemming from the accident. However, because standard renter policies include liability coverage, your renters insurance will help cover associated costs up to your policy’s limits.
Similar to personal property coverage, renters liability coverage can also apply to damage* you cause outside your home. For example, one morning, you head out for a run and accidentally step over your neighbor’s expensive garden, causing significant damage. In this situation, filing a claim through your renters policy to cover any repair costs is possible.
*If you cause bodily injury or property damage while driving your vehicle, your auto insurance liability coverage will help you cover the associated costs.
4. Provides Compensation if You Must Relocate
Most renter insurance policies typically include additional living expenses coverage, which provides housing aid if your rental becomes uninhabitable due to a covered peril. This type of coverage is also called “loss of use.” Loss of use may cover temporary living expenses such as hotel bills, food expenses, and moving costs. Without renters insurance, you’d need to pay for these expenses out of pocket, which could be expensive.
As with all coverage types, the amount of aid you receive will depend on your policy’s limits and any other conditions outlined in your policy.
5. You Can Schedule Valuable Items for Additional Coverage
As mentioned, even the best renters insurance coverage is subject to your policy’s limits. Furthermore, these limits often cap coverage amounts for high-ticket items, like jewelry or major electronics. So, how do you get coverage for the expensive family ring you inherited? This is where scheduling an item, or adding an endorsement to your renters policy, comes into play.
If you have a valuable item worth more than what your policy’s sub-limits will cover, you can ask your insurer to add an endorsement. You will typically have to get the item professionally appraised, but once you do, your insurer could add a separate coverage limit for your ring or jewelry at an additional cost.
So, Is Renters Insurance Right for Me?
Given how inexpensive renters insurance is compared to other coverage types for the protection it offers, carrying a renters policy is almost always worth providing you with a financial safety net in the event of a sudden disaster. And in some cases, a landlord may require you to have a renters policy before you can sign a lease.
At AIS, we pride ourselves on being your one-stop resource for all your insurance needs. Whether you’re seeking additional information on renters insurance or are ready to purchase, our team of insurance specialists can help. To learn more about how AIS can help you find quality renters coverage, give us a call at (888) 772-4247 to speak with a licensed agent, or start your quote online today.
The information in this article is obtained from various sources and offered for educational purposes only. Furthermore, it should not replace the advice of a qualified professional. The definitions, terms, and coverage in a given policy may be different than those suggested here. No warranty or appropriateness for a specific purpose is expressed or implied.
