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Imagine coming home to your apartment after a long day of working and leaving your bag with your laptop in your car. When you wake up the next morning to get it, you see that someone has broken into your car and stolen your expensive laptop. The good news is that you have renters insurance, so your insurance company will help pay for a new laptop, even though the theft occurred outside your actual home.
A common misconception people have about rental coverage insurance is that it only covers the items inside your rental home, but this type of coverage extends to much more. The right policy offers coverage for your personal belongings as well as liability and additional living expenses.
Around 55% of U.S. renters have renters insurance, according to SafeHome.org, but we wouldn't be surprised to see this number increase over the next few years as more and more people take advantage of the financial protection and peace of mind this type of policy offers.
Renters insurance aims to provide you with essential financial protection should an incident occur, like fire or theft. For instance, if you accidentally cause a fire in your rental home or apartment and damage the property, your items, and even your neighbor's items, your apartment insurance will help cover the costs.
In some cases, your lease agreement will require you to have renters insurance, but it's worth having this type of coverage even if your landlord doesn't require it. Why?
This type of insurance can offer essential peace of mind if an accident occurs, like a fire. If you're like most people, you don't think a fire will ever happen to you, but the unfortunate reality is that thousands of unintentional residential fires happen in the U.S. each year. According to the U.S. Fire Administration, residences saw 353,500 fires in 2021 alone, causing $8,855,900,000 worth of damage.
While the initial benefits of renters insurance are clear, they extend well beyond the home. This type of coverage can include more than you realize. Let's look at the three main categories of coverage.
With personal property coverage, your renter's insurance policy will help pay to replace certain assets, such as your:
While not all policies are the same, most tenant insurance covers the costs of these items if they become damaged due to fire, wind, hail, vandalism, ice collapse, smoke, and more. Plus, your policy can cover you if these items become damaged or stolen outside of the home, though you'll have to check your policy details about what kind of coverage you can expect.
Accidents happen, and unfortunately, you could be held liable for damage. For example, if you accidentally cause a fire that damages your neighbor's unit and property, the insurance company will help cover the costs of their damaged items as well as any legal costs you might incur.
Liability coverage typically includes two categories: personal liability and medical payments. Personal liability coverage pays for legal costs that could accompany lawsuits and any damage to another person's property as a result of your actions. Meanwhile, if someone injures themself while visiting you at the rental property, the medical payments coverage will pay for any medical treatments or hospital costs they need as a result of the incident.
If your home becomes uninhabitable because of damage, your insurance policy will help cover the expenses for temporary lodging and food. This can include things like:
You can also add more coverage for an additional cost with optional riders for things like pet damage liability, which pays for any damage your pet causes.
Like most types of insurance, renters insurance doesn't cover everything. For example, your landlord will typically hold property insurance, which will pay for damage to the actual building. Your policy also won't pay for damage that results from events like earthquakes.
Other types of coverage your policy won't provide include:
Before enrolling in a policy, double-check what the insurer covers and what they don't.
Even the most robust insurance policy will come with a few limits. When looking into your options for rental occupant insurance, you need to take the time to look over the coverage limits and see what situations you can file a claim for.
Most policies have a cap on theft coverage. What that means is your insurance company will only reimburse you a certain amount for your stolen items, so if you have anything of higher value, like expensive art or jewelry, you may need to purchase additional coverage for these times. To make sure a policy has enough coverage for your personal property, calculate the overall value of the assets you want to insure before getting insurance.
Let's look at the different types of thefts and whether your insurance will cover them.
If you go away for a few days on vacation and come home to find that someone broke in and stole several of your possessions, your insurance will help pay for the stolen items. You need to call the police as soon as possible and start the necessary paperwork for a faster and smoother claims process.
One of the many ways insurance for renters extends outside the home is by reimbursing you for items that someone stole in a mugging incident. For example, if you're walking around town away from your apartment and someone steals your phone or wallet, your insurance will cover the cost of these items so long as you contact the police and file the claim in a timely manner.
Your insurance company will reimburse you for your stolen bike, even if it wasn't at the rental property during the theft. Considering around 175,200 bike thefts occur every year in the U.S., according to the FBI, this kind of coverage can offer you invaluable peace of mind, especially if you rely on your bike to get to and from work.
While your car insurance should cover the costs of a stolen vehicle, your leaseholder protection insurance offers coverage for the valuable items you have in your car. For instance, if you leave your phone in the front seat and a perpetrator takes advantage by breaking into your car, your insurance will help pay for a new phone.
Anyone considering any type of insurance coverage wants to know whether the costs are worth it. According to the Insurance Information Institute, the average premium for renters insurance is $173 per year, which comes out to just $14.42 per month. If your landlord requires you to have rental insurance, they will likely include this premium in your total rent cost.
Although insurance for renters is relatively cheap, you can still save money on your premiums by qualifying for different insurance discounts. For example, a lot of insurance companies will offer lower premiums if you install a home security system, have (and maintain) a good credit score, or install smoke alarms. You could also save money by bundling with other types of insurance, like for your car.
So, is it worth it? Considering the rate of car break-ins has gone up by 25% since 2019, according to LookupAPlate, having a policy in place can provide the ultimate peace of mind and financial protection, even outside the home.
Although not all landlords require their tenants to get insurance, it's still a good idea. Insurance for renters offers coverage for liability, additional living expenses, and your personal property. Even if a violator steals your possessions while you are away from home, your insurance can help cover the costs of those stolen items, which can offer essential financial protection.
When looking for a policy, you need to think about how much coverage you need, what your budget is, and which insurance company to go with. The best way to find the right policy is by working with experts like our team at Insurdinary.
We can help you compare quotes from the country's top insurance companies for policies that match your unique needs. If you want to embrace the many benefits of renters insurance and enjoy protection even beyond the home, we can help you find the perfect policy.
Contact our Insurdinary team today to start exploring quotes and learn more about your options.