Renters Insurance—Do You Really Need It?

Most people who own a home have homeowners insurance to protect their homes, the property within it, and any visitors that may be injured on the property. In fact, most people with mortgages are required to carry homeowners insurance by their lender. 

However, one thing this insurance generally doesn’t cover is renters. It usually only covers damages incurred by the homeowner. So, who covers the renter’s possessions? 

The renters insurance company.

But what exactly is renters insurance, how much money does it cost, and what does it cover? Perhaps most importantly, should you consider signing up for a renters insurance policy?

What Is Renters Insurance & What Does It Cover?

Renters insurance (sometimes called tenants insurance) is a financial product designed to help ease the financial burden on renters when unexpected events, also known as covered perils, occur. Most renters insurance policies have three primary forms of coverage:

Personal Property Protection

There are several unexpected events that can lead to a loss of personal property. For example, if a home you rent catches on fire, a burglar breaks in, or a hurricane strikes, you may lose valuable possessions. 

The good news is that most renters insurance policies cover these types of losses. 

Liability

There are countless reasons you may find yourself with unexpected financial liability to someone else as a renter. Some of the most common unforeseen circumstances include:

  • Dog Bites. If your dog bites one of your guests, you may be required to cover the cost of medical bills and pain and suffering, which can amount to thousands of dollars or more. 
  • Building Damage. If you cause damage to the building itself, or a neighbors unit and/or possessions. For example – starting a fire in your unit that spreads to a neighboring unit.
  • Kitchen Fire. If you accidentally leave a kitchen appliance running for too long and it results in a fire, you may be on the hook for the repairs. 
  • Slip & Falls. If a passerby trips on one of your children’s toys in the yard while walking their dog, you may find their medical bills in your mailbox. 

The simple fact is that this list could be a mile long, but with a quality renters insurance policy, you won’t have to worry about these covered financial liabilities. 

Additional Living Expenses 

Some unforeseen events may cause you to be displaced from your home or apartment. For example, if a broken pipe floods your house, the contractors who fix it may require the home or apartment to be empty during repairs. 

In this case, your cost of living may increase dramatically as you’re forced to find other living arrangements. Renters insurance policies help to relieve this burden by footing the bill when unforeseen and unavoidable additional living expenses weigh heavy on your budget.  

Pro Tip. Like any other form of insurance, renters insurance policies come with coverage limits. Make sure to consider these limits when you sign up for a policy to ensure you’re fully covered in a worst-case scenario event. If you’re not sure how much money your belongings are worth, follow this guide from Zacks to determine the fair market value of your possessions. 

Who Needs Renters Insurance?

If you’re not a homeowner, chances are you need renters insurance. That’s true even if you don’t have many possessions. After all, possessions aren’t the only points of coverage in a quality renters insurance policy. 

What will you do if a fire happens and you have to leave your home for a month or two while repairs take place? Of course, it’s nice to lean on family and friends, but it’s even better to have an insurance policy that acts as a safety net. 

In some cases, you can’t necessarily fall back on the people that support you. 

For example, suppose someone were to be injured because of something you accidentally did at home. In that case, you may be liable for their medical expenses and financial judgments for pain and suffering. Asking friends and family members for help with this could put an undue burden on loved ones.

The bottom line is that if you don’t own the place where you live, (for example, if you’re living with a friend or family member) you should still consider renters insurance since you aren’t eligible for homeowner’s insurance. 

How Much Does Renters Insurance Cost?

Asian woman calculating renters insurance payment

As with any other form of insurance, renters insurance prices vary wildly depending on the provider and the amount of coverage provided. However, the cost is generally minimal. 

In fact, according to research done by the U.S. News & World Report, the average cost of a renters insurance policy in the United States is $13.43 per month. To put that price into perspective, that’s less than the cost of five cups of coffee per month at an average price of $2.70 per cup.

It is important to keep in mind that the $13.43 monthly cost is an average. The price you pay can vary from a few bucks a month to around $40 or more per month depending on your location and the risks it poses, your pets and the potential risks they pose, the amount of coverage your policy comes with, and the insurance provider you choose to work with.  

Why You Should Consider Getting Renters Insurance

As mentioned above, if you rent your home, you should strongly consider signing up for a renters insurance policy. Although it’s nice to feel like unforeseen events won’t strike in your home, the simple fact is about 5% of people with renters insurance filed a claim last year. 

None of the 5% of insured individuals thought they were going to have an event at home that would lead to a financial burden. 

Going a step further, the average claim is in the thousands of dollars. So, if you don’t have thousands of dollars lying around waiting for an accident to happen, chances are that spending a few bucks a month for coverage is going to benefit you in the long run. 

How to Find the Best Renters Insurance Policy for Your Needs

Most people wouldn’t buy a house without the assistance of a real estate agent because they don’t want to miss something that costs them thousands in the long run or overpay for when they make their purchase. It’s also best to have an agent on your side when finding insurance plans. 

Talking to a professional is one of the best moves you can make when you shop for renters insurance. At Torian Insurance, your expert is available for a no-cost consultation with nothing more than a click of a button. Request your free consultation and we’ll give you a call shortly. When we call, we’ll discuss:

  • Your Needs. Every renter has unique needs and it’s important that your unique needs are addressed with the insurance policy you choose. 
  • Your Pets. Dogs are a man’s best friend, but they also pose a financial risk if a bite were to occur. We’ll talk about your dogs and make sure you’re covered if something ever happens. 
  • Your Belongings. You don’t want to pay for coverage you won’t use, and you don’t want to realize that you don’t have enough coverage when you file a claim. We’ll talk about your belongings and work with you to find the amount of coverage that fits your unique lifestyle. 

Once we’ve chatted for a moment, we’ll comb through our list of trusted insurance companies and policies to find a few options that meet your needs at the best prices and walk you through deciding which is the best fit. 

How to File a Claim on Your Renters Insurance Policy

Filing a claim on your renters insurance policy is an easy process. Simply follow the steps below:

Step #1: Contact Your Landlord

It’s best to make sure your landlord is aware of any loss that occurred on the property, even if the loss is yours alone. However, in many cases, when a renters insurance claim is filed, there’s damage to the home that warrants a homeowners insurance claim, as well.

Step #2: File a Police Report if Necessary

If the loss is the result of criminal activity, like a burglary, call the police as soon as possible. You’ll likely need to submit your police report to your insurance company as proof of the loss. Moreover, it’s best to file a police report after a crime anyway. After all, if the police find the wrongdoer, your report may stop someone else from being victimized. 

Step #3: Contact Your Renters Insurance Provider

Next, you’ll need to contact your renters insurance provider and let them know a loss occurred. Your provider’s representative will walk you through the beginning stages of filing the claim. 

Step #4: Document Everything

Take pictures and or video’s of anything having to do with the loss prior to a claim. Having this information can make it easier to file the claim. For example, if a burglar got into your home by breaking a window, take a picture of the broken window. If a tree fell through the roof and landed on your television, take a picture of the broken television. 

While you’re taking pictures, take notes describing the pictures you’re taking and the value of the property you lost in the event. Also, look for any receipts that show the value of the property you lost.  

If you didn’t lose any property, then the claim is strictly a liability claim. Document the actions that led to the incident and keep any copies of medical bills, repair bills, and other liability-related statements. 

Step #5: Finish Your Claim

Once you have all your pictures and documents together, contact your insurance company again and provide them with all of the information you’ve compiled. The insurance company will take it from there by performing an investigation and paying you for your covered losses in the end. 

Common Myths About Renters Insurance

Excited spanish woman renting home. Boxes unpacking in new apartment

Myths are commonplace in the world of finance and insurance, but believing them can lead to real financial pain. Some of the most common and damaging myths about renters insurance include:

You Don’t Need Renters Insurance Because Your Landlord Will Pay for Damages

In most cases, your landlord is under no obligation to cover your costs when unforeseen events occur. For example, if the home you rent blows away in a hurricane, your landlord doesn’t have to pay for the possessions you lost when the hurricane hit nor the additional living expenses you’ll incur from being displaced. 

The only time your landlord will be required to cover your damages is when those damages are the direct result of their negligence. For example, if you notice sparks coming from the air conditioning unit and you tell your landlord, and those sparks cause a fire that leads to losses a month later, your landlord may be liable for damages and displacement expenses. However, in the vast majority of events, your landlord is a victim too and won’t have to foot your bill.

My Stuff Isn’t Worth Much So I Don’t Need Renters Insurance

Understand that renters insurance policies can be set up to replace old items with new ones. So what something is “worth” today won’t come into play if an incident occurs and it needs to be replaced. You’d be surprised at how quickly the cost of your possessions will add up. In fact, the average American living in a two-bedroom apartment has about $30,000 worth of stuff lying around. So, you’ll want that covered. 

However, your possessions aren’t the only points of coverage in a rental insurance policy. It also covers you if you’re liable for damages and if you get displaced due to unforeseen circumstances. 

Renters Insurance Costs Too Much Money

As mentioned above, Renters insurance is actually pretty inexpensive. In fact, it costs slightly less than the cost of buying five cups of coffee per month at the average price per cup in the United States. 

My Roommate’s Policy Has Me Covered

That’s not exactly the case. Your roommate’s renters insurance was purchased to cover their belongings. If they were to tell their insurance company that your belongings are theirs during a claim, they’re committing insurance fraud. 

It’s always best to carry your own insurance policy to ensure that your belongings, liability, and displacement expenses are covered in an insurable event. 

Final Thoughts

Considering the extremely low price of renters insurance and the high probability that, in the long run, you will face an unforeseen event that costs you thousands, there’s no reason to avoid signing up for a policy. Our trained insurance professionals will help you find the policy that gives you the best coverage without breaking the bank. All you have to do is click here to get started.

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