The Importance Of Renters Insurance And Why You Must Have It

Aug 13, 2020 | Personal Insurance

Frequently, tenants tend to think that everything’s covered once they settle in their rented home. They forget to purchase renters’ insurance and often think it is not essential. There’s a misconception that it is expensive and they start to ignore the importance it would give them in the future.

Renters insurance is an inexpensive type of insurance and very easy to avail. It protects you from unexpected events that go out of control. Certain events like fire and theft can cause extreme damage and loss to your personal property. Let’s discuss renters’ insurance for a better understanding of what it is and its importance.

What is Renter’s Insurance?

Renter’s insurance is also called tenant’s insurance. It pertains to the insurance policy that protects the tenant from certain perils that might affect his or her personal property.

The owner of the home you are renting is liable for the whole building or property. You, as the renter, are responsible for your personal belongings. The owner would not be accountable for the loss and damage to them.

What Does It Cover?

Renter’s Insurance aims to PROTECT you. In the event of a loss due to theft or fire, renter’s insurance will replace what had been lost. Your personal belongings are still covered even if the loss happened outside your rented home. Its coverage types are:

Personal property coverage. This covers your personal belongings by replacing them and for the repair cost of your valued stuff up to your coverage limit.

Liability coverage

This covers the damage you incurred to other’s property or if someone gets injured inside your apartment.
Additional living expenses. This covers your additional living costs if you happened to stay outside of your rented home due to a disaster or unforeseen events.

You may need to rent a hotel if your apartment got destroyed by fire or another disaster. Your renter’s insurance will pay for the additional costs to maintain your standard living.

What Are The Things To Consider?

The amount of coverage

Buying renter’s insurance covers determined possessions. You’d be needing different coverage which you see fit for what you need. More coverage means the higher price of the policy you are going to purchase.

Deductible

This would play a big part in deciding the cost of your policy. Your insurance kicks in once you have shed the money out of your pocket.

Actual cash value or replacement cost

With actual cash value, lost or damaged possession would be paid the amount at its present cost. Normally, an item gets depreciated as the years pass.


Replacement cost replaces the same or exact lost item regardless of the price it might be in at the time of loss. This would be a better option compared to the actual cash value. It won’t depreciate the value of your property and would reimburse the full cost of your stuff.

Location

An area prone to theft and other disaster incurs a raise on insurance cost. This would indicate frequent claims especially if the place has previous claim reports because of these causes. Expect a higher price on your policy.

Why Is Renter’s Insurance Required?

Landlords require renters insurance

If you will ask if it’s mandatory, the answer is no. But landlords have the legal right to require you to purchase renter’s insurance as part of your lease agreement. The reasons behind this are sensible as it only protects the business of the owner. It may include protection against lawsuits in an event of personal property loss of a tenant.

The property owner also wants to ensure that you are well-covered to protect his investment

An event of loss or damage might push you to find another place if you don’t have the means to shoulder the expenses. The owner then would have to find another tenant. If you are insured, once a break-in or incident happens you will likely to prolong your stay in their apartment.

Aside from the advantage, it would give them, it is best to purchase renter’s insurance for your own good. It wouldn’t cost that big to buy one. You would benefit more from it since it caters protection for your welfare and valuable possessions.

Why Do You Need It?

The need to be protected is the number one reason why you must have renter’s insurance. Other reasons are as follows:

Renter’s insurance provides protection at a very affordable price. It only costs an average of $16 per month or $187 per year and will depend on some factors. It could be the type of coverage, the deductible amount, your location, and how much is your needed coverage. Every state has a different average renter’s insurance cost.

It protects your personal belongings from losses caused by your covered perils. It includes items like computers, furniture, clothes, and electric gadgets. Some of the perils that may be included in a renter’s insurance policy are:

  • Fire
  • Volcanic eruption
  • Riot or commotion
  • Damage from smoke
  • Vandalism
  • Theft
  • Water damage
  • Guest injuries
  • Damage caused by vehicles
  • Windstorm

Conclusion

Most landlords require their tenants to purchase renter’s insurance. Presenting the proof of your policy means you are cooperative and can handle future negotiations with them. It is also one way of reducing their responsibility to you once a problem arises.

Its liability coverage protects you from damages you might cause against other people and their property. It also covers injuries and medical bills to your guests that happened within your rented home. Legal expenses are shouldered by the insurer up to your limit.

It covers additional expenses to maintain your normal standard of living. Some perils happened unexpectedly and it would affect your way of living. You may need to rent a hotel if your apartment got destroyed by fire or another disaster. Your renter’s insurance will pay for the additional costs including food.

Your personal belongings are also covered while you travel. Even if you have your stuff with you or inside your car on a trip, and they got stolen, they are still covered. It doesn’t matter where you are in the world because your possessions are protected from loss by your insurance.


Renting a home has been worry-free since renter’s insurance kicked in. It is indeed an affordable type of insurance that would save you big time from future troubles.

With all the advantages we discussed above, wouldn’t it be safe to acquire one now? Please do not wait until it is too late, get renter’s insurance today. Give us a call and we’ll help you get sorted out.