If you pay rent on your residence, you should have a renter’s insurance policy for your protection and peace of mind. Even if your landlord or property management company doesn’t require tenants to carry renter’s insurance, there are so many reasons to have one. By having a better understanding of what renter’s insurance is and what it covers, as well as what to look for when shopping for a renter’s insurance policy, you can make sure you’re protected as a tenant.
What is Renter’s Insurance?
Specifically, a renter’s insurance policy is designed to provide property damage and personal injury liability coverage to those who rent their homes. A renter’s insurance policy can apply to any residential rental, whether it be a single-family home, apartment, duplex, or any structure in between.
One of the most common misconceptions renters have is that it’s their landlord’s responsibility if something happens to their rental unit. And while this may be partially true, the fact remains that the average landlord’s insurance coverage does not include protection for tenants’ personal property, nor does it include liability protection for tenants and any dependents living under their roof.
What Does Renter’s Insurance Cover?
A renter’s insurance policy, then, can provide you with added protection when you’re renting out a home, apartment, or other dwellings. If somebody breaks into your apartment, for example, your renter’s insurance policy can kick in and pay to replace items that are stolen such as jewelry or appliances such as a flat-screen TV. And with bodily injury liability coverage, your renter’s insurance policy can also protect you if a visitor is injured inside your rental.
Renter’s Insurance May Not Cover…
Of course, a renter’s insurance policy doesn’t cover everything—and it’s important to be aware of the limitations of a renter’s insurance policy before you buy. For example, if you have roommates, understand that their belongings will not be included as part of your protection. Theft or damage protection only applies to your personal items and the belongings of any dependents living with you. If you have a rental with roommates, they’ll need to purchase their own individual renter’s insurance policies.
It is also worth noting that a renter’s insurance policy will not cover pest-related damage to your property. For example, if a mouse gets into your apartment and chews through one of your television cables, this won’t be covered. However, your landlord may be responsible for covering property damage caused by pest problems in such a situation.
Reasons to Carry Renter’s Insurance
Now that you have a better understanding of what renter’s insurance is (and what it’s not), hopefully, it’s a little more clear as to why you need this type of coverage. Still not convinced? Consider these key benefits to carrying renter’s insurance.
Your Landlord Might Require It
These days, many landlords and property management companies are actually requiring that tenants carry a minimum amount of renter’s insurance coverage before moving in. This is a stipulation often included in the lease agreement, so if you’re planning on renting out a place in the near future, be sure to check the terms of your lease. If this is a requirement, you will need to provide proof of renter’s insurance at the time of your move-in. In addition, you may need an end-of-lease cleaning.
Protects Against Theft of Property
No matter how safe or secure your rental may be, it’s never a bad idea to have extra protection in place in the form of personal property protection and theft coverage. Unfortunately, a theft can happen to anybody at any time—and it’s not always in the form of somebody breaking into your home. A renter’s insurance policy will protect you even in a situation where somebody you allowed into your home (such as a friend or relative) ends up stealing some of your belongings.
The main thing to remember when it comes to seeking reimbursement for property theft is that you need to be able to prove not only that the property stolen was yours, but that it had a certain value as well. This is where keeping records of the amount paid for big-ticket items (such as flat-screen televisions and other electronics) as well as their serial numbers can come in handy if you ever need to make a claim.
Includes Bodily Injury Liability Coverage
Another reason to have renter’s insurance that many tenants don’t even think about is that it provides bodily injury liability protection; this means that if somebody is injured inside your rental, you can be protected against legal action. Consider, for example, that you’re throwing a party at your rental home and somebody trips on a rug in your living room, resulting in injuries. Without bodily injury coverage through your renter’s insurance policy, you could be held legally and financially responsible for that person’s medical bills and other costs related to the accident. You will also need cleaners for your post-party cleaning!
With a renter’s insurance policy in place, you can enjoy added protection and peace of mind if an injury ever does occur on your rental property.
It’s More Affordable Than You Might Think
All too often, tenants are initially hesitant to purchase renter’s insurance because they assume it will be too costly. In reality, renter’s insurance is extremely affordable—especially when you consider all that it covers. Prices for renter’s insurance can vary based on the amount of coverage you need and where you live, but it is not uncommon to pay less than $15 per month for coverage.
Your Policy Can Be Tailored to Suit Your Needs
Renter’s insurance policies, like many other types insurance, can be tailored and customized to suit your lifestyle so that you aren’t paying for more coverage than you need. With most renter’s insurance policies, you can decide how much protection you want against theft/damage, personal injury, property damage, and more. You can also customize your deductible and other key aspects of your policy to make sure it works for you.
Shopping Around for Renter’s Insurance
Ready to start shopping for renter’s insurance? There are a few tips to keep in mind that will help you find the right policy for the right price.
Don’t Overlook the Deductible
Start by making sure you’re comfortable with the deductible you choose. After all, the deductible is the amount that you’ll be required to pay out-of-pocket before your coverage will really kick in. A higher deductible will mean lower monthly payments, whereas a lower deductible will increase your monthly payments slightly.
Know What’s Covered vs. What’s Not
Since renter’s insurance policies are totally customizable, you’ll want to make sure you have a solid understanding of what will be covered versus what may not be covered by your specific policy. For example, theft of your flat-screen TV and TV mount may be covered, but the theft of your roommate’s video game console won’t be unless he or she has purchased their own separate policy.
Calculate the Amount of Coverage You Need
Deciding on how much coverage you need can be difficult, as this will require you to roughly estimate the total value of your belongings. The good news is that there are some free tools available to help you decide on the right coverage amount for your needs, the size of your rental property, and other factors. The main thing to keep in mind when deciding on how much coverage you need is the replacement value of your most precious/valuable items. This may include anything from electronics to clothing and jewelry.
Consider Additional Policies
Not all items may be covered by a renter’s insurance policy and may thus require their own “rider” policy or additional coverage purchased. Wedding and engagement rings are common examples of types of jewelry that often fall outside the scope of a traditional renter’s insurance policy. Check with your insurance company to see if you can add a rider policy for these items so you can enjoy added protection and peace of mind.
Understand the Claims Process
Before choosing a policy with a specific insurance company, make sure you understand exactly how their claims process works and that you’re comfortable with it. Claims processes can vary from one company to the next, as can the total amount of time needed to process and complete a claim.
Compare Identical Quotes Between Companies
As you’re comparing quotes to find the best value for your money, make sure you’re comparing apples to apples. Check to be sure, for example, that the deductibles and coverage amounts are the same on each quote—and that they include the same type of coverage as well. Above all else, you’ll want to choose the policy that offers the best value—not necessarily the policy that’s the cheapest. Remember that you generally get what you pay for when it comes to renter’s insurance coverage.
The Bottom Line on Renter’s Insurance
If you don’t already have a renter’s insurance policy in place, now is the time to start shopping around. For a relatively small monthly cost, the right renter’s insurance policy can provide you with additional protection and peace of mind that your landlord’s insurance most likely does not.