Renters Insurance Explained

Renters Insurance Explained

If you rent a condo or apartment, renters insurance is an important tool that can provide you with security and peace of mind.

You may ask, “do I need renters insurance?” since your landlord should have property insurance of their own.

Before you brush off the idea of renters insurance, read on to learn more about this crucial form of insurance that can keep your valuables safe.

Renters Insurance Basics

Your landlord is the property owner and you’re the tenant, but that doesn’t mean that their insurance will cover everything that’s important to you. If your belongings are stolen, damaged, or even vandalized, your landlord’s insurance won’t foot the bill to replace them.

As you ponder the question “do I need renters insurance?” remember that it’s designed to protect you from a wide range of unexpected and unpredictable disasters. Whether it’s a fire in your apartment to a break-in, without insurance, you’re expected to pay for everything out of your own pocket.

Your landlord’s property insurance covers the structure of the building itself. However, it does not cover your personal items like electronics, clothing, jewelry, or other important valuables.

Even if you have a roommate who has a renters insurance policy, you’ll still need to purchase your own. There are some insurance companies that will provide a single policy for multiple roommates, but it’s best to obtain a separate policy just for yourself.

If you have a shared policy and your roommate files a claim, your rates can go up. Not to mention, if your roommate moves out, you’re left footing the bill or stuck with additional coverage you no longer need.

Protect Your Personal Property

You work hard for the things you have, and you don’t want to lose them due to a disaster or emergency. With renters insurance, your policy will cover anything and everything that you keep in your apartment

Look for a policy that has a reasonable deductible, but that also gives you a decent limit of coverage. This limit means that your insurance company will reimburse you a specific amount up to the total listed on your specific policy. For example, if your personal property coverage limits are $25,000 and you lose $20,000 worth of stuff, you’re covered.

Document everything you own by taking photos, logging serial numbers, or recording a video. If something happens later down the road, it will be much easier to show your insurance adjuster what was lost when you have proof in hand.

Why Do I Need Renters Insurance for Liability?

The word liability is scary. What if someone sues you because they become injured while hanging out in your apartment? Renters insurance offers you some protection against liability claims.

Let’s say your friend comes over and gets bitten by your dog. Maybe a worker from your property management needs to do some repairs and they slip and fall on the kitchen floor. Renters insurance protects you from unexpected lawsuits.

The term “liability coverage” means that your insurance will help to pay a person’s medical bills if they need treatment as a result of something that happens in your apartment. Without this coverage in place, you could be stuck dealing with a lawsuit or being responsible to pay for some else’s medical expenses.

Liability also covers accidents that happen at home. If you damage something or cause damage to something at your neighbor’s, your policy should cover some or all of that, too.

What Else Does This Insurance Cover?

Renters insurance doesn’t just cover theft if your stuff gets stolen from your apartment. If your car gets broken into or someone steals your stuff while on vacation, your policy should help make you whole again. It’s a great way to get more peace of mind no matter where you go.

If your apartment building catches fire and you’re temporarily displaced, renters insurance should also cover the cost to put you up in a hotel. This coverage should also help you pay for food and may even cover the cost of clothing.

Ask your insurance representative for more information about coverage for temporary housing and other living expenses. Your policy should clearly list everything it covers line-by-line. You can request to have your limits increased if needed, but keep in mind that this could raise your premiums or deductible.

You might be surprised to learn that renters insurance will even cover things like spoiled food. If your fridge goes out, your plan may reimburse you for lost food as a result of faulty or broken appliances.

Renters Insurance and Water Damage

Whether it’s a natural disaster, flood, or leaking plumbing, water damage is one of the most common causes for an insurance claim. If you live in a flood-prone area, your renters insurance will not cover damages as a result.

For those living in a designated flood zone, separate flood insurance is required. Ask your landlord if they have flood insurance if it’s a cause for concern.

A burst pipe or plumbing problems can wreak havoc on your property and your stuff. This type of water damage may be covered by your landlord’s insurance if the issue is not your fault. However, only renters insurance will pay for the damage done to your belongings while the landlord’s policy will cover the structure itself.

Let’s say you accidentally cause a flood in your apartment and water damages the electrical outlets. In this case, your renters insurance will cover the damages and pay for the repairs. 

How Much Coverage do I Need?

You might wonder how much coverage you should ask for when you get a renters insurance policy. The answer really depends on what you own and how valuable it is.

Take a detailed inventory of your belongings and document serial numbers so you have everything on record. Take notes about your belongings including clothing, computers, and even your home decor. If you happen to have antiques or rare collectibles, you may need a separate policy or line item that covers these especially valuable items.

Once you have a basic idea of the total value of the things you own, you can use this number to obtain a personal property coverage limit. Make sure you account for everything including furniture and clothing so you know you’re covered.

An average personal property coverage amount for renters insurance is approximately $30,000. Personal liability coverage usually has a limit of $100,000. Do your research to find an insurance provider that will give you the coverage you need at a great rate.

When you select your coverage limits, don’t forget to look at the deductible. This is the amount you’ll need to pay out of pocket if you ever file a claim. Most deductibles on renters insurance policies are between $500 and $1,000.

How Much Does This Type of Insurance Cost?

The good news about renters insurance is that it’s extremely affordable. You may be able to bundle your insurance with other policies like your car insurance if you choose to go with the same company. Ask your auto insurance provider about the possibility of bundling to help you save.

On average, renters insurance only costs about $15 per month which comes to $180 per year. If you prefer to pay for a year at one time, you could be eligible for a slight discount.

When it comes to having peace of mind, $15 per month is worth every penny. Whether it’s a break-in, a flooded apartment due to burst pipes, or even vandalism, renters insurance is an affordable way to make sure you’re covered.

Keep in mind that $15 per month is just an average and that your rate might be different. Rates can vary depending on the state you live in, how high your deductible is, and how much coverage you have. Shop several insurance companies to ensure you’re getting the best rate possible.

Your credit score may play a role in how much you pay for renters insurance. Obtain a copy of your credit report and check your score before you apply to make sure you’re getting a good rate based on your credit standing.

Another factor that can affect your rate is the value of your belongings. The more stuff you have or the more valuable it is, the more coverage you’ll need, which may also make your rate slightly higher.

Get Peace of Mind with Renters Insurance

When asking “do I need renters insurance,” the answer is simple. This affordable insurance coverage will protect your stuff and keep you safe from potential liability.

Talk to your insurance agent or shop around to get the best rates. Once your policy is enacted, you won’t just gain coverage, you’ll also gain peace of mind. 

For more information about insurance and coverages, get a quote here or contact us today to talk to an insurance guide.