More than 108 million Americans are renters — and the majority of them do not carry renters insurance.
What about you?
Do you understand the different types of renters insurance and what it covers? Should you purchase a policy, or is it just another bill you don’t need? Exactly what is renter’s insurance, anyway?
We’ll answer those important questions and more, so keep reading!
What Is Renters Insurance?
Much like a homeowners insurance policy, renters insurance covers the loss of your personal property due to fire, theft, or certain natural disasters. It also provides protection from liability claims or injuries that are not the result of a structural problem (that’s your landlord’s responsibility).
Most renters insurance policies do not cover damage from an earthquake or flood. It will also not cover your possessions if your home becomes infested with bugs, mice, or other pests.
Do I Need Renters Insurance?
In some locales, renters may be required to carry insurance. Your landlord may want to see an active policy before you’re able to sign a lease agreement.
Even if it’s not required in your area, it’s never a bad idea to be prepared. Renters insurance is probably one of the most affordable policies you’ll ever purchase, and it’s worth the peace of mind. Sites like this have more information about what’s required in your area and what’s included in different policies.
3 Types of Renters Insurance
Now that you have a better understanding of what renters insurance is, let’s look at the three main areas it covers.
- Personal Property Damage
If your personal belongings are damaged or destroyed in a covered peril, your policy will reimburse you for the cost of those items.
It also provides protection if something happens away from your home — for example, if your laptop is stolen from your car or a pickpocket snatches your phone while you’re traveling.
Most policies offer the choice between full replacement cost (the amount you paid to buy the item) or actual cash value (current value of older items). There’s also likely to be a cap on expensive specialty items, such as artwork, jewelry, firearms, or electronics.
- Loss-of-Use or Additional Living Expenses
If your home becomes uninhabitable due to a covered reason, this portion of your insurance premium will pay for your living expenses in the meantime.
You’ll submit receipts for a hotel room, restaurant meals, and other associated costs. The insurance company will then reimburse you for these expenses.
- Liability Coverage
What happens if someone trips and falls inside your home? Or what if your normally friendly dog bites someone while they’re visiting?
The liability coverage in your renters insurance policy will pay for the medical and legal expenses incurred. This could make the difference between a lawsuit that’s a minor annoyance — or one that cripples you financially.
Get Rental Insurance Coverage Today
Far from just “another bill,” renters insurance could be a real lifesaver if you’re a victim of theft or a natural disaster. It’s a small price to pay for peace of mind, so get familiar with the different types of renters insurance in your area.
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