Do you rent your home? If the answer is yes, you are not alone as more and more people are choosing to rent and live in cities these days. There is also a huge population of people who are in college and rent apartments with their friends. This is very normal because young people need their place to be cheaper and like to hang out together and do fun things.
If you do rent, a large amount of the responsibility of actually maintaining the property is the landlord. This burden on the landlord includes having insurance on the actual structure that you live in. However, where a lot of tenants run into problems is thinking the insurance the landlord has on the dwelling itself will cover their personal belongings. Do you ever ask: Why do You Need Renter’s Insurance?
If while renting you experience some sort of disaster, such as a big storm or a fire, your landlord’s insurance will have them covered and the building repairs will be taken care of. But, the big mistake most renters make is that they think their possessions are covered, which isn’t true unless you have renters insurance. As a renter, it also makes sense that you would want insurance that protects all of your possessions in case someone breaks in and steals your possessions or even vandalizes them.
Renters Insurance Is A Good Investment — Why You Need Renter’s Insurance
Renters’ insurance is relatively cheap, with the average annual premium only being $188. This breaks down to about $15 a month, this information comes from the Insurance Information Institute. The fact that renters insurance is so cheap makes it a smart investment. Compare that $15 a month to the cost that you would be paying to get a new TV, jewelry, furniture, a computer, and even clothing. Also if your place isn’t livable after the incident, your landlord‘s insurance will not cover your living expenses, but your renter’s insurance will.
With all of that information being a known fact to most renters, only 40% of renters actually carry insurance. This is according to a 2015 Insurance Information Institute study.
You should know these important things when buying a renters Insurance Policy.
What does renters insurance cover? If you elect to get standard renters insurance also known as an HO-4 policy you will be reimbursed for the loss and/or destruction of your personal belongings. It does this for 16 things, which include:
- Windstorm or Hail
- Fire or Lightning
- Volcanic Eruption
- A Falling Object
- Riot or Civil Commotion
- Damage Cause By An Aircraft
- Damage Caused By A Vehicle
- Vandalism Or Malicious Mischief
- A Falling Object
- Weight of Ice, Snow, Or Sleet
Other events that renter’s insurance will protect you from are sudden accidental tearing or cracking of a hot water heater, air conditioner, and even a sprinkler system. If it gets cold where you live you have to worry about your plumbing or other household systems freezing up and renters insurance will take care of that problem.
Some Things Renters Insurance Doesn’t Cover
If there is a flood or an earthquake, renters insurance will not cover that. This means you will actually have to pay for any repairs if you see a loss for these reasons. You can purchase flood insurance as a policy by itself. The same goes for Earthquake insurance, it can be purchased separately or sometimes as an add-on to your renter‘s policy, depending on the company.
Other Renters Insurance Protections
A common misconception is that renters insurance will only cover your personal possessions. However, there are certain things that standard renters insurance protects that also might be of interest to you.
You might not know that liability insurance can be a part of renters insurance. This means that if a person is injured in your home and it’s because of your negligence and that person sues you. Your liability portion of your renter’s insurance will cover you in an event like this. You are also covering damage that you or your family accidentally do to others. There is something called an umbrella liability policy that will cost you extra. But, it covers you for things such as libel and slander. This umbrella insurance will kick in once you reach your liability coverage limit.
Liability usually covers you for things such as a dog bite a visitor to your house, a neighbor, or even a stranger. This can cover you on and off of your property, You have to check the policy you are purchasing because some insurance companies will exclude dog bites from your renter‘s policy. You will need to check with your agent to make sure you are covered if you own a dog.
Some more positive things about a simple and cheap renters insurance policy are that a policy will generally cover the cost of legal representation in case you ever have a lawsuit. Your policy will even cover the damages awarded to the other party. You can find good policies that start the liability around $100,000 and top out at $500,000. Your insurance agent will weigh your risk, however, we see most people doing a minimum of $300.000.
This Was A Simple Overview Of Renters Insurance
This was a quick and easy rundown of what renters insurance can do for you and why there really isn’t an excuse for any renter to not have it as part of their insurance policy. It could save you hundreds of thousands of dollars, but most people don’t even bother to use it, even though they know the option is out there.