Renters insurance or tenants insurance is an insurance policy designed especially for the tenants to provide coverage against the loss to their personal belongings in a rented home. It is a worrying fact that most of the people do not even know that the concept of renters insurance exists. Recent study shows that around 67 percent of approximately 80 million people who rent their homes do not have renters insurance.
There are two major reasons why tenants do not have renters insurance.
- Most of the renters blindly assume that they are covered under the insurance policy of their landlord.
- Others think they do not need to carry renter’s insurance policy.
The truth is that depending upon the landlord’s insurance policy won’t help because it provides coverage to the landlord against structural damage to the building. It does not deal with the damage to the personal property of the tenants inside their rented home. Disasters can strike anytime and anywhere. So it is wise to purchase renters insurance policy to protect your investment within the home you do not own. A renter’s insurance policy may cost you $125 to $300 depending upon the area you live in as well as the items and hazards covered under the policy.
Renters insurance provides coverage for specified objects and circumstances including-
- Personal property like furniture, clothing, electronics and electrical appliances.
- In an event of extreme damage to your home, your renter’s insurance policy may cover additional expenses like temporary rentals, hotel room bills, meals at the restaurant, etc.
- Personal liability arising out of an event of someone being injured in your dwelling unit. For example- A friend visits you and she tumbles over the poorly placed coffee table in the living room. Renters insurance covers the costs arising out of medical bills and legal proceedings in case the injured sues you.
- Damage to your home caused by the perils covered under the policy. For example- Collapse of the building, fire, water damage, electrical damage, theft and vandalism.
Certain items may not be covered under regular renter’s insurance policy. You can get them included under the insurance umbrella by purchasing an additional rider at a premium.
- Tenants who have valuables like artwork, rare paintings, coin and stamp collection, gems, jewels and jewelry should get an additional coverage for complete protection.
- Tenants who own pets too need an additional liability cover. For example- There is an electrician inspecting your home and his ankle looks like lunch to your pet. It will definitely be a problem for you in case you don’t have an additional cover.
- Also check if the policy values the belongings at the actual cost or replacement cost. Replacement cost is definitely higher since you will have to bring in new things. Actual cost is always less because it takes into account the depreciation in the value of items due to the usage over all these years.
Having a renter’s insurance policy will help you sleep soundly at night. The peace of mind it offers is way bigger than what you pay for it. If you do not have a renters insurance and should anything untoward transpire, you are in for a mess. You will have to get your belonging replaced out of your own pocket. In addition you may have lawsuits filed against you.
So taking renters insurance seriously and spending a couple of hundred dollars now will save you thousands of dollars and inconvenience later on.