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Last Updated on July 25, 2024 by Insurdinary Editorial Team | Fact Checked by Rhonda Gary -->
With the cost of living rising, many people in the U.S.A. are turning toward home rental instead of homeownership. This is largely true for families and individuals between the ages of 35 and 64.
If something goes wrong with your rental, you can simply call your landlord or property management company to address the situation. Yet, who can you call if your personal items go up in flames during a fire or flooding from a burst pipe temporarily makes your rental uninhabitable? Renters insurance is the answer.
Renting a house, apartment, or condo allows people to have stable housing without being wholly responsible financially for the upkeep of the property or any damages it sustains. Disasters can strike any home, regardless of who owns it. With renters insurance coverage, you can protect yourself, your household, and your belongings from the financial burden that often comes with housing emergencies.
According to the 2022 Renter's Insurance Industry Report, about 45% of Americans don't have renters insurance despite roughly 61 million people having some coverage. Of that group, Insuranceopedia reports that nearly 25% of renters never considered having insurance coverage as a tenant. If you rent your home but don't have coverage, keep reading to learn why buying renters insurance is one of the best decisions you can make.
Renters insurance provides protection against personal property losses and liability claims for accidents that may occur within your rental space. The policy won't cover structural damage or injuries caused by the building itself. Landlord insurance takes care of anything relating to the structure of the rental space but not tenant belongings.
Let's say an accidental kitchen fire breaks out in your apartment and destroys the kitchen and part of your living room. Your landlord's property insurance will cover repairs to the kitchen, living room, and all properties that go with the structure like the stove and refrigerator. However, that policy won't cover damage to your cookware, living room furniture, and other items affected by the blaze.
No matter how careful you are with your rental space, some things are out of your control. You have no control over your neighbors, strangers, or your landlord. You could experience a potentially life-changing situation through no fault of your own, leaving you with heavy expenses you can't afford.
That's where renters insurance comes in. Rental coverage is one of the easiest property insurance products you can buy. It offers substantial value and peace of mind because you know it'll be easier to rebuild your life if disaster strikes while you're renting a home.
Renters insurance isn't a legal requirement if you live in an apartment or rental property. However, the coverage offers many benefits that lessen the financial burden you could face if you experience an unfortunate life circumstance. If you're still uncertain if this coverage is right for you, consider these top reasons to get leaseholder protection.
You might be surprised to learn how much you own. Some people dismiss the need for rental property insurance because they don't think they own as much as a homeowner or that the items they have aren't worth much.
People can accumulate personal items over time and not realize it until they experience a loss. Even if you rent a small apartment alone, your furniture, clothing, television, cookware, computer, and books are just some of the personal items you might have. Those belongings can add up quickly.
The good news is that renters insurance will cover loss or damage to personal property, including luggage, electronics, clothing, computers, jewelry, furniture, and so on. Without coverage, you would have to replace everything you lose due to peril. Depending on your situation and budget, that list of expenses could be overwhelming.
Thankfully, a typical HO-4 tenant insurance policy includes a wide range of covered perils for personal property. Coverage may include:
Buying a renters insurance policy will safeguard your finances in case of a covered loss. It'll also help you rebuild your life by replacing or reimbursing you for your personal property.
As a renter, you're allowed to have guests visit your home. Though no one expects anyone to get hurt during a visit, accidents sometimes happen.
If you unintentionally injure someone or someone gets hurt on the property you rent, your renters insurance can help. Almost all standard apartment insurance policies include liability coverage.
Why is liability coverage necessary? This coverage protects you from lawsuits and judgments that a guest could file against you if they get an injury while visiting your home. Examples of injuries that you could be liable for include dog bites and trip-and-falls.
The amount of coverage you get depends on the policy you buy. Most renters insurance includes around $100,000 of liability coverage, but you can request more coverage in exchange for a slightly higher premium payment. The insurance may also include a smaller coverage for medical payments to injured persons.
Liability coverage through renters insurance only protects you against losses stemming from an accident. It will not pay out or cover anything that happens due to your negligent or intentional actions. For instance, your liability coverage won't cover a guest's injuries if they fell and hurt themselves because you pushed them.
Sometimes a peril renders a property temporarily uninhabitable. As a renter, you might wonder where you and your family will live while your apartment or rental home undergoes repairs. Not having a secure home and needing to stay in a hotel for several days or weeks can seriously strain your finances.
Renters insurance may help in this situation. Some policies include "additional living expenses" coverage. If you can't stay in your home due to one of the covered perils in your policy, your insurance provider may cover the increased costs you incur for you to stay elsewhere until it's safe to return to your property.
Coverage may include:
Though additional living expenses coverage is beneficial to have during a stressful time, the insurance will only reimburse you for expenses above what you would otherwise pay. Instead of paying 100% of your expenses, it will cover the difference between your typical monthly expenses and the cost you incur while living in temporary housing.
For instance, if your monthly rent is $1,000 and your temporary accommodations are $1,300, your insurance provider will reimburse you $300. The $300 difference is the increased living expense, so that's what the insurance will cover.
Some people assume that renters insurance is unaffordable as well as unnecessary, so they don't buy policies to protect themselves. However, USA Today reports that the average rental coverage premium in the United States is between $14 and $25. The amount you pay depends on several factors, including:
You could save on costs by bundling insurance products with the same insurer. Some insurance companies offer various products and provide discounts to policyholders with two or more policies. Depending on your insurer, you might also get discounts for having smoke detectors, security gates, alarm systems, and other safety features in and around your rental home.
With the low monthly payment and the option to save money with bundling and discounts, it's safe to say that having renters insurance is worth the price and more. Since you won't have to pay hundreds of dollars a month for coverage, you can allocate your finances to other bills, obligations, and savings.
If you experience a covered peril, your insurance will provide financial assistance. You'll have the coverage you need without losing the bulk of your money on premium payments, liability lawsuits, temporary housing, or personal property replacement.
As a landlord, you're responsible for taking care of your rental properties. Should something happen, you'll be the one who has to pay for repairs or a replacement — even if your tenant caused the damage.
For example, say that a renter gets distracted while cooking. They leave the stove on, and it leads to a fire. Traditionally, you'd be responsible for covering the repairs.
Requiring renters insurance can help mitigate this risk. Most insurance policies will help cover any damage renters cause to the property, which can reduce expenditures on your end.
In addition, renters insurance can help reduce liability risks. For example, say that one of your tenants owns a dog. That dog injures someone while they're at the rental property, which leads to a liability claim. Generally, you would be responsible for any injuries sustained on the premises since you own the property. If the tenant has a renters insurance policy, however, it may cover some of the damages.
It's for these reasons that so many landlords require tenants carry renters insurance; this way, they can protect themselves from some of the risks associated with renting out their properties.
You don't have to experience a loss or deal with a liability claim for an incident at your home to benefit from your renters insurance. Your policy can cover your personal property against theft and damage regardless of where you are.
Perhaps someone breaks into your car and steals your luggage while traveling, or someone steals your laptop from a local cafe. In both cases, your renters insurance could cover you for the theft. Some policies also include coverage for damage or theft of belongings in storage units.
Before getting tenant insurance, you should first assess your needs. Take inventory of your belongings in a document and photograph or record them. If you own expensive valuables with serial numbers, write them down and keep everything in a secure place.
The more evidence you have regarding your personal items and their worth, the easier it will be to make a claim for damages with your insurance provider. They'll ask for documentation to verify your claim and the value of your property.
After inventorying your personal belongings, research insurance providers to find the right one for your needs. You could do this by asking friends and family for references or searching online for renters insurance providers. Consider their rates, bundling options, and coverage before applying for coverage.
You don't have to own your home to experience a housing emergency like a burglary or fire. People living in apartments, rental properties, and condos are also subject to storm damage, theft or damage to personal belongings, and personal injury lawsuits. Homeowners can protect themselves financially by buying a homeowners insurance policy, but renters can do the same with renters or occupant insurance.
Occupant insurance can provide comprehensive coverage over different aspects of your life during an emergency. Most policies cover personal belongings, theft, liability, and loss of use. However, most insurance providers allow policy customization with riders to ensure renters can have the specific coverage they need.
If you're a renter without coverage, trust our Insurdinary team to help you find the right renters insurance policy for your family and budget. Insurdinary specializes in helping people of all backgrounds find the best insurance products from top insurers at affordable rates. With us, you can easily compare quotes from insurance providers and apply for coverage.
Become an insured renter today by completing our free quotes form online and comparing renter insurance quotes with Insurdinary.