Renter’s Insurance – why do I need it and what is it for?

One of the common benefits that renters tend to rely on is that they’re usually covered by their landlord’s insurance or their security deposit should something happen in their house/apartment. While your landlord is responsible for insuring the property against damages caused by fire and other disasters, this does not mean that your personal property and belongings are covered. If this comes as a surprise, then perhaps you should take a look at renter’s insurance.

What Does Renter’s Insurance Cover?

Renter’s insurance is multifaceted for those that decide purchase it.

Liability coverage: Living life can be a risky endeavor, especially if a significant event drains your savings and forces you to seek desperate options. While you may consider yourself and your loved ones protected, what about your guests? For instance, if someone comes over to your rented home, trips over your coffee table and breaks their ankle, you should be aware that you may be liable to pay their medical bills and legal expenses, as well as any other damages accrued. It certainly pays to think ahead of these eventualities, but consider this: if your child accidentally breaks your neighbor’s window while practicing lacrosse, your renter’s insurance may be able to cover the costs.

Personal property coverage: Take an inventory of all of your possessions and try to attribute a value to everything. When you come to think of it, the number may be WAY more than you’ve expected. Now imagine flooding, theft, or a fire takes away a significant portion—if not all, heaven forbid—in one fell swoop. How long would it take for you to replace every piece of essential household items and clothing, as well as family heirlooms?

If you have very expensive items, like an extensive jewelry collection or you’re a collector of vintage musical instruments, you can take out extended coverage that provides you with higher limits of reimbursement. This is sometimes called floater insurance (or scheduled personal property coverage). Having floater insurance may increase your deductibles, but it certainly ensures that your pricier items are covered in the event of a mishap.

As another benefit, a renter’s insurance policy can cover your personal belongings even when they’re not inside your home. As an example, if you take your MacBook with you on a trip and it is damaged or stolen, you may be eligible for a full replacement.

Additional Living Expenses (ALE): Hypotheticals can be hard to wrap our heads around. For instance, do you know what you’d do if your rented home was burned down or rendered unlivable by a calamity? While most of us probably would shudder to think of this eventuality, it is certainly a possibility.

For those that have the foresight to invest in renter’s insurance, you can rest easy with the peace of mind that this coverage actually will pay for your temporary living expense. This coverage extends to non-ordinary expenses that you wouldn’t normally incur from such a dynamic shift of living arrangements, including hotel bills, restaurants, and other costs. This also helps not burden your immediate family if they feel they need to shelter you in the mean; in other words, you’re covered!

The Cost of Renter’s Insurance

Despite the eventuality of disaster striking renters, only 31% of renters in the US currently have renter’s insurance (according to a survey conducted by the Insurance Information Institute). What makes this all the more interesting is renter’s insurance typically only costs an average of $15/mo (according to 2009 statistics compiled by the III).

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Of course, we all feel like the exception to the rule—that is, until something happens. At RiskBlock, we seek to help our clients avoid financial disaster that could easily be prevented by taking out a renter’s insurance policy. Click here to begin guaranteeing you and your family are protected from all that life can throw in your way.