Don’t Assume
More than a third of all Americans—35.6 percent—rent their home or apartment, according to the U.S. Census Bureau. Yet as reported in a 2014 Insurance Information Institute poll conducted by ORC International, only 37 percent of renters have renters insurance. This figure contrasts sharply with the 95 percent of homeowners who carry a homeowners insurance policy. Some renters don’t bother with a policy because they assume they're covered by the landlord’s insurance policy, but in most cases a landlord’s policy covers only the structure, not the tenants or their personal possessions. To make sure their property is adequately protected, renters need to take out their own policies.
It May Be Required
A landlord's insurance policy typically covers only the residential building and the surrounding property, not the tenants’ possessions. In fact, in many states landlords are allowed to require their renters to carry a minimum amount of liability and personal property insurance as part of the lease.
It Covers Many Emergencies
Most renters insurance policies cover a wide range of emergencies, including windstorms and hail; fire and lightning; smoke; ice, snow, and sleet; damage caused by vehicles and aircraft; explosions; theft; vandalism; falling objects; riots; water or steam damage from internal sources, including plumbing, heating, air conditioning, sprinkler systems, and appliances; and even volcanic eruptions. Policies typically do not cover damage due to floods and earthquakes, although many companies offer separate riders for these occurrences.
It Protects Your Property
Many renters vastly underestimate the value of their personal property. But when you start adding up the cost of common possessions like computers, electronics, furniture, clothing, and jewelry, you can see how you could quickly reach a tidy sum. According to Esurance.com, the average renter owns more than $20,000 of personal property that could be protected against theft or damage with a renters insurance policy.
It Covers Your Belongings When You Travel
Renters insurance covers your personal property even when it isn’t in your home or apartment. For example, when you’re traveling, a policy will cover the luggage, clothing, jewelry, and sporting equipment you bring along with you against loss, theft, or damage.
It Protects Your Guests
Liability insurance clauses in most renters insurance policies also cover visitors, so if someone is injured in your home, you won’t be on the hook for medical or legal fees, as long as they’re below the limits on your policy. This coverage also extends to injuries to people making deliveries to your home.
It Covers Damage You May Cause
If you accidentally injure someone in your home, or if you accidentally cause damage while in another location, many renters insurance policies will cover legal and medical fees up to the policy limits. For example, if your dog bites someone in the park, or if you accidentally break someone’s window, your renters insurance may cover the costs.
It Pays for Alternative Living Arrangements
If your residence becomes uninhabitable as the result of a fire, water damage, or other covered disaster, a renters insurance policy may pay for additional living expenses, including the cost of a hotel, meals, and the like. The covered amount can vary greatly depending on your policy, so be sure and examine this clause carefully.
Renters Insurance is Inexpensive
The cost of renters insurance policies varies by location, but it is typically very affordable. According to Insurance.com, the national average yearly cost is $326, or about $27 a month, for a policy with coverage of $40,000 for personal property, a $1,000 deductible, and $100,000 of liability protection. Costs will vary based on your coverage limits, deductible, and credit history.
Many Insurers Offer Discounts
If you already have auto insurance and decide to take out renters insurance with the same company, you may qualify for a multipolicy discount that typically ranges from 3 to 10 percent. Many insurers also offer discounts if you have certain safety features in your apartment or home, including smoke detectors, security systems, and flood alarms.
Related: The Best Smoke Detectors for the Home
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