6 Good Reasons to Get Renter’s Insurance

6 Good Reasons to Get Renter’s Insurance

Many landlords require tenants to carry renter’s insurance under their lease agreements. Whether your landlord requires it or not, renters insurance can be a smart investment for you and your belongings.

Most policies cost only a few hundred dollars annually. Here are six good reasons to consider getting one: 1. Covers your property.

1. Covers Your Personal Property

Your landlord’s property insurance typically doesn’t cover your possessions in the event of an accident. This is why many landlords require that tenants carry renters insurance.

Renters insurance typically covers your belongings in the event of theft, fire, and water damage. Some policies also include liability coverage, which pays for injuries or damages to others caused by you, like if your child throws an errant baseball through a neighbor’s window.

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It’s important to create a home inventory and understand the value of your possessions before making a claim. The insurer will usually reimburse you on an actual cash basis, which takes depreciation into account. You can often purchase additional coverage for high-value items, such as jewelry or artwork.

If a problem covered by your policy, like a fire, makes your rental uninhabitable for a while, renters insurance will pay for expenses like hotel stays and restaurant meals. This is known as additional living expense coverage.

2. Covers Your Liability

If someone trips over your cat’s leash and breaks their arm, renters insurance will usually cover the medical costs. It will also cover legal expenses and other damages you may be held liable for. In addition, most renters policies offer personal liability coverage, which is worth the money if someone gets injured in your home.

Landlords typically have their own form of homeowners insurance that covers the physical structure, but it doesn’t protect tenants’ belongings. Most landlords require proof of renters insurance as a condition of occupancy.

If a fire destroys your clothes, furniture and electronic equipment, a standard renters policy will pay to replace it. It can even reimburse you for the cost of additional living expenses if your rental becomes uninhabitable after an event like a fire. However, this is usually limited by a dollar amount or time frame. Adding more coverage usually increases the premiums, so be sure to select the right amount of coverage for your needs.

3. Covers Damage to Other People’s Property

When your 12-year-old daughter plays softball in the front yard and hits a home run into a neighbor’s kitchen window, renters insurance can help pay for things like repairing the window and any medical expenses for the neighbor. It also might cover legal fees if the neighbor sues.

Keep in mind that landlord insurance typically only covers the structure of your building and your landlord’s possessions, not your personal belongings. That’s why it’s important to get a quote for renters coverage and do a home inventory that includes photos or videos of your possessions and their value (see the USAA Technology Coverage Endorsement as an example).

If you are displaced from your apartment due to a covered problem, like a fire, most renters policies include additional living expenses (ALE) coverage that pays for hotel rooms and meals while your place is getting repaired. There’s usually a dollar limit and a time limit for ALE payments, though.

4. Covers Loss of Use

In the event of a disaster, a loss of use part of your renter’s insurance policy can cover temporary living expenses. It can pay for things like hotel stays, meals out, and other essential services. These expenses are typically capped at a certain amount per night, week, or month.

You may also want to consider a valuable items rider to cover expensive jewelry, art, or other valuables. It’s best to do a thorough inventory of your belongings and determine how much it would cost to replace them.

Another important benefit of renters insurance is personal liability coverage. This can help pay for legal fees or medical bills if someone gets hurt on your property. It can also reimburse you if you’re found responsible for causing an injury. This is in contrast to a landlord’s insurance, which generally only covers the structure of the home and not the tenants’ belongings.

5. Covers Additional Living Expenses

It’s a true case of better safe than sorry, and it’s a lot less expensive than you might think. Insurance policies can cost just a few hundred dollars per year and can cover many things you might never imagine.

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For example, if someone gets hurt at your place (say, from an errant baseball that you knocked through a neighbor’s window) and sues, renters insurance typically covers their medical bills and legal costs. Liability coverage also helps pay for small repairs if an accident occurs that you’re responsible for, like when your friend trips over your dog’s leash or cuts their hand on the kitchen knife.

Finally, additional living expenses coverage, or ALE, pays for hotel bills, temporary rentals and restaurant meals if a covered loss makes your home uninhabitable. It’s usually capped at a certain amount and has a time limit, such as 30 days or 60 days.

6. Covers Medical Payments to Others

Many renters have a hard time justifying the expense of insurance. But as the cost of everything continues to go up, it’s becoming increasingly important for everyone to carry a policy.

Renters insurance policies typically include a small amount of coverage for medical bills incurred by third parties as a result of an accident at your apartment, regardless of who is to blame. For example, if a friend trips over a rug and breaks their head, your policy’s medical payments to others coverage might help pay their hospital bills.

Additionally, if something covered by your policy makes your apartment uninhabitable—say, that fire we mentioned earlier or the pipe burst that ruins your kitchen—your renters insurance may help you cover additional living expenses until it’s fixed. Often, that’s enough to pay for a hotel and meals while you wait. (This is called loss of use coverage.)

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