All You Need To Know About Renters Insurance

If you are renting, do you know that your landlord’s policy only covers damage to the dwelling and provides coverage to protect the landlord, but does not cover any of your personal belongings?

If your personal items such as a laptop or iPad, clothes or furniture get stolen, it will cost you at least $5,000 to replace them.

Do you know that if you leave your faucet open in your apartment, and it causes water damage to the property, you will be held liable for the damages because you were negligent?

Do you also know that many apartments now require renter’s insurance before they will lease the property to protect themselves?

Renter’s insurance provides coverage for your personal belongings and gives you peace of mind. It doesn’t cost much but most tenants overlook rental insurance?

What is rental insurance?

As the name implies, renters insurance provides insurance coverage for renters. Rental insurance covers:

  1. Personal Property
  2. Loss of Use
  3. Liability Coverage

Personal Property

Rental insurance provides coverage for your personal belongings if they are lost or damaged due to fire, smoke, theft or other events specified in your policy.

Loss of Use

If you are unable to live in your rented home or apartment for some reason, the insurance policy will pay for hotel, food and other living expenses while your place is repaired.

Liability Coverage

Renter’s insurance also provides liability coverage.  If your kid gets in a fight and injures another kid, the policy will cover your damages subject to the limits of the policy. It will also protect you against lawsuits if you are sued or if your dog bites a guest.

If your guests are injured on your property, that will also be covered by the policy.

How much rental coverage do you need?

The coverage you need depends on the value of your personal belongings. The best way to determine the coverage you need is to inventory all your personal items, and furniture and find out what it costs to replace them.

There are two types of policies – cash value policies will compensate you for the depreciated value of your belongings, and replacement value policies will compensate you for the replacement value of the belongings.

Typically, you will need $30,000 to $50,000 coverage if you are renting an apartment and around $100,000 if you are renting a home.

How much does renter’s insurance cost?

Renter’s insurance is very affordable.  It only costs $10 to $15 per month. If you combine it with your auto insurance, you will get a discount, which will lower the cost even further.  If your discount is substantial, you may actually get the renter’s insurance for free.

How do I keep track of what’s in my house in case something goes wrong?

The best way to keep track of all the items in your house is to take a video of the things in your home and store the video either in a bank locker or in the cloud.  If something unfortunate happens to your home, and you have to submit a claim, you will have proof that you owned all the items in the video.

Bottom Line

Renter’s insurance is very affordable and costs only $10 to $15.  For that small cost, it will protect your personal items that cost thousands of dollars. In addition, it will pay for hotels if your home is damaged.  Most landlords now expect renters to have renters insurance.  If you a tenant, consider getting rental insurance for peace of mind.

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