Renters insurance explained: what you should know

An increasing number of landlords and property management companies require tenants to get renters insurance.

As it’s not the case in all situations, if your landlord doesn’t require you to get such a policy, you might be breathing a sigh of relief.

However, as a tenant, it’s highly advisable as it can protect you from serious financial problems in the future.

 

Why get renters insurance?

Many people choose to rent because they don’t want to deal with all the headaches involved with owning a property.

Expenses include homeowner’s insurance, the costs involved with maintaining a property, and paying to repair it if damage occurs.

However, when you do rent a property, many tenants don’t realize that the landlord’s insurance doesn’t cover them or their belongings.

When renting a furnished apartment from Blueground, for example, their landlords do have full insurance for their properties, but that insurance only covers the property itself and anything else that the landlord owns.

So, if something terrible does happen like the building burns down, the landlord isn’t liable for the value of your belongings.

But that’s not all this type of insurance covers.

Above all, a good policy will also protect you if your belongings are stolen if someone else incurs injury or if their property is damaged due to your negligence, and more.

These policies are also relatively inexpensive as they range between $15 and $30 per month, according to the National Association of Insurance Commissioners (NAIC).

Fees also depend on where you live.

And this cost is more than worth it when you consider asset protection.

You’ll also receive quite a bit of personal liability coverage too.

But let’s be more specific in terms of why you really need renter’s insurance.

 

Replacing personal property

You might think that your belongings aren’t worth insuring. Maybe you’re fresh out of college and don’t have that much.

Or you just moved across the country and didn’t bring all that much with you.

And at first glance, it might seem true.

However, take a moment to consider how much it would cost you to replace everything you do own.

Take a tally of all of the clothes, electronics, furniture, and other personal items. You might be surprised at how much it adds up to, and it’s likely that’s money you don’t have readily available to replace your belongings.

But even if you did have it, why waste it when there’s a much more effective alternative?

 

Covering the cost of a temporary residence

In some situations, you might find yourself without a place to live.

If a fire, a flood, or other issues occur that will require a lot of repairs to the rental property, you will need to find a place to live in the meantime.

Reflect on whether you might have enough cash on hand as a renter in NYC to book a hotel room in the city for a week.

Most good renters’ policies will cover the cost of a hotel until your rental is habitable again.

So, even if you do have money spare to pay for alternative lodgings, once again, the question arises of why you should when there’s a perfectly viable alternative.

 

Coverage for personal liability

One of the most important forms of coverage that renter’s insurance provides is for personal liability.

If you own a dog and it bites someone, or if someone slips and falls, the policy will help you.

So you won’t have to pay for those damages out of pocket.

Not only that, but the insurance company will even help you find an attorney and pay their fees to defend you if a lawsuit is filed against you.

This coverage is beneficial if adjacent properties are damaged and you are found responsible.

For example, you will be covered if your sink overflows and floods the unit below you.

Alternatively, if a fire starts in your kitchen and it affects the apartment above, you will also be covered.

Normally, in such situations, you would be found responsible and would be liable to cover the costs of repairing the damage to the other apartments, at the very least.

Other costs you can expect to incur include alternative lodging until the apartment is habitable again, replacing damaged property, and so on.

In the end, it can be a hefty sum that could even push you into bankruptcy.

With renter’s insurance on your side, though, you will have a lot of support and it can help you avoid a significant financial loss that would otherwise take you a long time to recover from.

 

Other benefits

There are other benefits to this type of insurance that most people are not aware of.

For example, coverage also applies beyond your residence. So, if you’re traveling with your belongings, you can rest easy because you are still covered. While the limitations of the policy apply, it’s still better than having no coverage at all.

In fact, even if you don’t think your policy covers you for a particular item or situation, it’s still worth talking to the insurer. Some people have been able to successfully make a claim on food going bad due to prolonged power outages.

Other situations include a cell phone being stolen while on vacation, or accidentally hurting someone far from their residence.

If you work from home, it’s even more imperative that you get renters insurance.

And consider what would happen if damage occurred to your property and you had to find different lodgings.

Instead of having to try to work from coffee shops to access WiFi, your policy will provide you with the coverage you need to find alternative lodgings where you can continue to work with no issue.

A surprising number of tenants don’t have renter’s insurance, especially when you consider the risks involved and the low cost.

Many people think that something like being flooded by their neighbor or their place catching fire isn’t something that can happen to them.

So why spend the extra cash? But is saving $17 a month (the average cost for tenant insurance in California, the cost of a few cups of coffee from Starbucks) really worth risking potential bankruptcy?

After all, people think it can’t happen to them until it does, and they then regret it when their life goes up in flames.

So, don’t be like them. Protect your future and get renters insurance now.