While not all landlords require renter’s insurance, it’s always a good idea to purchase a renter’s insurance policy as it is an excellent tool to protect yourself and your family from potential financial burdens. You never know when something unexpected could happen, and insurance can pay to replace your personal belongings in case of a loss event such as a fire, flood or theft.
Renter’s Insurance Is Worth the Cost
More and more landlords and management companies are requiring that their tenants provide proof of renter’s insurance. The purpose of renter’s insurance is to protect tenants’ belongings, including any appliances they bring in, while also limiting landlord liability. Landlords often have full coverage home warranty insurance to cover appliances and systems in the unit in case of repair or replacement; as a renter, you will need your own insurance to cover your personal belongings.
Under renter’s insurance, you can also rely on personal liability protection. This type of coverage legally protects you if someone you know has an accident in your residence. You won’t be held responsible for medical bills or lost wages. Instead, your policy would cover those costs.
Loss of use protection is also helpful if you suddenly are unable to live in your residence because of a covered event. Should this happen, you could end up with expenses beyond your regular living expenses, and your policy can cover that excess.
Recognize Whether You Need Renter’s Insurance
It’s a bit of a catch-22, but here’s the thing. If you have a low income, you need insurance because you’re most likely to be devastated by financial loss. On the other hand, if you have a low income, it’s more challenging to come up with extra cash to pay for insurance.
Liability damages can completely ruin your financial situation if you’re someone who lives from paycheck to paycheck. Remember, these types of losses happen every day, and they can happen to you. Costs can be extremely high if you’re found liable for something, and if you don’t have renter’s insurance, you could lose everything.
Certain circumstances demand renter’s insurance over others. Consider for a moment your family if you have one. Would your personal situation implode if you had to deal with a sudden major financial burden due to something that renter’s insurance would cover? If the answer is yes, you should find a way to afford the monthly premium.
The Coverage You Need
Questions come up all the time about how much renter’s insurance is needed. To decide, you need to determine the limits you’re comfortable with regarding personal property coverage and personal liability coverage.
Personal property coverage should reflect the cost of your possessions plus a little bit more. With this policy, you’ll be covered if all of your property is lost or destroyed. You can always choose to have less coverage, but that will be your limit. Before deciding on a policy, take inventory of what you own and how much it’s all worth to determine how much coverage you need.
Personal liability insurance depends on how much risk you’re willing to accept for yourself and your residence. Assuming you brought your appliances into your residence, if your dryer has a short in it and causes a fire, you’re on the hook for the damages caused by your machine. If you’re living in an apartment and that happens, you’re also responsible if anyone in the neighboring apartment sustained injuries because of the fire your appliance caused. It only costs a few dollars to add extra coverage, and the peace of mind it brings is well worth it.
Property Insurance vs Renter’s Insurance
Property insurance is different from renter’s insurance. The homeowner can purchase property insurance for the property you rent, but it will not cover the things you bring into the home. The homeowner’s coverage only extends to items inside the unit that came with the place.
Renter’s insurance also isn’t nearly as expensive as homeowner’s property insurance. Annually, property insurance can run a thousand dollars or more. Renter’s insurance is markedly different and monthly payments are very affordable.
Property insurance also only insures a specific property, which makes sense for your landlord. On the other hand, renter’s insurance policies will travel with you and your things. Limits and circumstances still apply, but your coverage goes with you when you move from one place to another. Even if you’re traveling and happen to lose a favorite necklace, there’s a good chance your renter’s insurance will cover it.
Renter’s insurance is essential if you rent your residence. The cost is worth every penny to know that in case of a loss event, you’ll have coverage. Even for the financially secure, renter’s insurance is still important. You never know when you might need it.
Low-income individuals need it because they are more likely to be affected in case of a crisis. To keep costs manageable, get the coverage you need for your belongings and your comfort level with the risks you may end up taking. Your landlord’s homeowner’s insurance will not cover you as renter’s insurance will, so it is imperative to consider purchasing renter’s insurance to keep your finances in good order.
