While it may seem like an unnecessary expense, particularly if you don’t have a lot of expensive furniture or other possessions, rental coverage can protect you against steep financial losses stemming from thefts, natural disasters, and accidents. It can also provide assistance in situations where you have to move out of your home while it is being rebuilt or repaired.
Many people mistakenly think that their landlord is responsible for the cost of repairing damage or assuming liability for injuries and accidents that happen in a rented apartment or home. This isn’t true. Your landlord’s property insurance doesn’t cover your losses due to theft or damage, nor does it cover your liability for injuries or accidents in your home. That’s why many landlords include a clause in their leases and rental agreements that either strongly recommend (or even require) that you purchase a renters insurance policy. So, if you’re renting an apartment, here’s what you need to know:
Reasons Why You Need to Purchase Renters Insurance
Protect Your Belongings
Renters insurance can help you replace items that are stolen or have been damaged in a fire or other calamity. Even if you don’t have a lot of stuff, being able to quickly replace high-ticket items such as sofas, televisions, and your laptop can make a huge difference in getting your life back to normal after an unpleasant event.
Your policy may also cover thefts and losses that take place away from your apartment. For example, if you’re walking down the street and someone swipes your purse or backpack, you may be able to file a claim for the loss of your wallet, keys, and other items.
In addition to covering the cost of stolen or damaged possessions, renters insurance can also cover potential liability for damage and losses suffered by others due to your actions or negligence. Your policy not only helps cover the cost of repairs, replacing property, or medical bills, but can also provide you with legal representation in case of a lawsuit.
- Damage to Your Apartment. While you would never intentionally damage your apartment, everybody makes mistakes and accidents do happen. While landlords are responsible for the general upkeep of their rental units, you, the tenant, are responsible for any damage beyond normal wear and tear. You are also responsible for maintaining a reasonable level of cleanliness and sanitation. All it takes is one drunk friend, an unattended candle, or a roach infestation caused by forgetting to take out the trash before you went on vacation to create the need for costly repairs and services.
- Damage to Other Apartments or Common Areas. Sometimes the damage isn’t just to your apartment, but to a neighbor’s apartment. The classic example that lawyers and insurance agents often cite is that of the overflowing bathtub: If your drain gets clogged and your bathtub overflows, you are responsible for the cost of repairs not only for your own apartment but also for your downstairs neighbors place. Your policy will cover the cost of repairing this damage.
- Accidents and Animal Bites. If a visitor slips and falls or is bitten by one of your pets, the visitor can sue you for their healthcare costs and other damages. Renters insurance can cover these costs and, in many cases, help you preserve a relationship that might be otherwise damaged by having to negotiate financial compensation.
Ensure Shelter in Case of a Disaster or Major Building Damage
Fires, floods, and earthquakes, oh my! Nobody likes to think about them, but they do happen. Unlike a theft, which is upsetting but usually doesn’t leave your home unlivable, major building damage may leave your apartment or rental home unlivable, if only temporarily. Renters insurance can cover the cost of staying in a hotel while your home is under construction.
Many Landlords and Property Managers Require It
Many landlords and property management companies require renters to obtain renters insurance. Some actually require tenants to provide a policy number before receiving keys to the apartment. You can avoid hassles and delays by researching policies before you start apartment hunting.
If You Work at Home
Don’t assume that standard renters insurance will cover your home office or business-related possessions (such as your computer). Standard renters policies may also not cover liability issues that result from business activities. For example, if a delivery person who is bringing you a job-related package slips and falls, standard insurance may not cover his or her injuries. Talk to your insurance agent about adding a business rider to your policy.
Saving Money on Renters Insurance
This type of insurance is usually quite affordable. However, there are still several ways to save money on renters insurance:
- Contact several insurance companies and compare quotes on similar policies.
- Are you a college student? Ask your parents to check with their insurance agent to see if you are covered under your family’s renters or homeowners insurance policy. If not, you may still be able to qualify for a student discount on a policy of your own.
- If you already have auto or health insurance through an agent, you may qualify for a multi-policy discount.
- You’ll typically be asked to choose between a policy that covers the cash value of your property or its replacement value. As the name suggests, replacement value policies cover the cost of buying a new item if your old one is stolen or destroyed. Cash value policies only reimburse you for what your property was worth at the time of your claim. If you are primarily interested in liability coverage and aren’t worried about replacing your property immediately after something happens, a cash value policy may be more affordable.
While saving money is important, you don’t want to be under-insured either. Always review your policy options to make sure that you are getting the level of coverage that you need.
If you’re still on the fence about renters insurance, one exercise is to begin the application process. There’s no obligation to do this, but taking part in the application will give you the opportunity to do an inventory of your personal property. You may be surprised at how much it is worth, how much it would cost to replace and how long you would have to work to earn enough money to replace the things that you need. These estimated costs, plus the risk of liability for injuries and accidents, may help you make up your mind.
Have you ever had to make a claim on your renters insurance policy? How did that work out for you?