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What is Renter’s Insurance and Why Do You Need It?

By December 23, 2020Personal Insurance
Blog-What is Renter's Insurance and Why Do You Need It

Most renters do not know the monetary value of all the things they own. This is the reason is that they have been acquiring these properties bit by bit over time. An average renter has personal belongings of about $20,000, excluding valuable documents. So what happens if thieves raid your apartment, or if the property catches fire? Will the landlord’s insurance cover these?

Renters need to know that the landlord’s insurance only covers the building and all the accessories that belong to the landlord, explains Lonnie Bush, a professional property management company. It doesn’t cover anything belonging to the tenant. Thus, there is a need for tenants to protect their properties in case of loss or damage. Tenants can only achieve this protection by having a renter’s insurance.

What is renter’s insurance?

Renter’s insurance is an insurance policy that protects tenants from the risks they face while residing in a rented property. Renter’s insurance covers the properties of tenants such that if there is any damage, loss of property, or liability, they will get protection.

How much does renter’s insurance cost?
Blog-What is Renter's Insurance and Why Do You Need It-Renters Insurance Cost

Standard renter’s insurance is very affordable and inexpensive, considering the value it offers. For the cheap ones, the average renter’s insurance is about $130 per year, while the expensive insurance policies have an average of about $230 per year.

Getting extra coverage may also attract additional money, but the benefits are more than the cost. Policies that offer actual cost value are cheaper than those that offer replacement cost value. However, we advise that when you are getting a renter’s insurance, you should choose the one that provides the “replacement cost value”.

Why do you need renter’s insurance?

Renter’s insurance is essential for every tenant. Below are the reasons you should have a renter’s insurance:

1. Personal liability coverage

Blog-What is Renter's Insurance and Why Do You Need It-Broken Finger Peronsal Liability

A lot of situations can expose tenants to liabilities, so tenants should have an insurance policy that will protect them. For instance, your dog could bite a neighbor, or a guest could slip, fall, and sustain injuries in your apartment. You can not predict all the events that can expose you to liabilities in a rented property but having a renter’s insurance can provide financial protection against all forms of liabilities.

A standard renter’s insurance can protect you from a minimum of $100,000 liability charge. If you have a higher risk for liabilities, you can increase the coverage limit of your insurance, but you will have to pay a higher premium on the renter’s insurance. Owning certain pets or breeds of dogs can expose you to more liabilities. Some insurance companies do not cover certain breeds of dogs, and those that cover these breeds will require a higher premium.

2. It protects against loss of personal property
You can lose your properties as a result of an electrical surge, fall, lightning, vandalism, fire outbreak, riots, etc. A renter’s insurance will protect your belonging against theft and damage. It is important to note that standard policies do not cover damages from natural disasters like earthquakes or floods. If the rental property is prone to such disasters, you should get a supplemental policy.

3. It provides coverage even when you travel

Blog-What is Renter's Insurance and Why Do You Need It-Airplane in the sky

A renter’s insurance does not only protect your property within the confines of the apartment. It also covers loss or damage that occurs to your belongings when you are away from home. If your item gets damaged or stolen while you are away with them, the renter’s insurance also provides coverage for it. However, ensure that you read the policy to know the extent of coverage that your insurance offers.

4. It covers additional living expenses during emergencies
Situations occur and the rental property may become uninhabitable. It could be as a result of fire outbreaks, flooding, pest infestation, etc. When this happens, you have to vacate the rental property and seek temporary shelter elsewhere, most often a hotel. The landlord’s insurance will not cover the expenses that tenants incur during the period that tenants had to make temporary living arrangements.

However, a renter’s insurance coverage will take care of the expenses you make during this time. Usually, the policy specifies the length of time that it will cover.

5. Most landlords request for it

Blog-What is Renter's Insurance and Why Do You Need It-Signing An Agreement

Many landlords now require that you possess a renter’s insurance before they can lease their property to you. That is because they do not want to be liable for the damages that tenants sustain and also, some landlord’s insurance companies make it a prerequisite before they can provide insurance to a rental property. Having a renter’s insurance will make the landlord rate you as a responsible tenant, and you will not miss out on your chosen accommodation because you did not have one.

All tenants need to have a renter’s insurance. Owning one will provide you with peace of mind as you enjoy the rental property.