If you rent a home, condo, or any other type of living structure, chances are that you want to keep your possessions insured. Most renters don’t think about purchasing renters insurance until it is too late, but do you really need to have it?
The answer to this can go both ways. If you choose to protect the contents and possessions within your rented property, then it would only be in your best interest to purchase some type of renters insurance. From a legal standpoint, there is no law that legally requires you to purchase an insurance policy for your rented property. The only way that you would be required to purchase a policy is if you signed a contractual agreement between you and the landlord stating that you must have insurance.
Many renters just assume that the owner of the property already has insurance that covers potential disasters. This is true for many instances, as in most cases the property owner does maintain an insurance policy. But, this policy only protects the property and not your belongings. To most property owners, your personal belongings are your responsibility.
So what exactly is renters insurance and why is it a good idea to purchase? This type of insurance will help protect your items in the event that a loss occurs. A loss is any type of incident that damages your belongings, or it can also include theft. If you do decide to purchase a policy, your items will only be covered up to a certain dollar amount. An example of this would be purchasing a $15,000 insurance policy. In the event of a qualifying loss, your insurance company will pay you up to $15,000 if the claim is valid. Also, this cost can cover temporary living if a disaster occurs that causes your rented property to become unlivable (fire, water, mold). This means that you will be able to stay at a hotel and purchase food without worrying about the monetary aspect.
Every insurance company is different, every state is different, and every loss is different, but here are some incidents that renter’s insurance will more than likely cover: Fire or smoke damage, accidental injuries to guests, lightening damage, windstorms, vandalism, hail, theft, vehicle damage, explosions, aircraft damage, damage from heavy snowpack, volcanic eruptions, and rioting or civil commotions. It would be smart to go over your policy with your insurance company to make sure that you know what exactly you are covered for.
Most insurance policies also come with a deductible. This is the amount that you, the renter, must pay out of pocket upon filing a claim. Say you have a deductible of $500 and experience a $2,000 loss, your insurance company will then give you $1,500. You will be responsible for footing the other $500. Most insurance companies will let you adjust the deductible.
You will want to read your policy carefully, because there are certain losses that insurance will not cover but many people just assume is covered. Here are some examples of some losses that will not be covered under renters insurance: Terrorist attacks, water damage (burst pipes, flooding, heavy rains, etc), and earthquake damage.
It isn’t a bad idea to also consider buying additional coverage to round out your current plan. Nobody can predict the future, and the unthinkable can happen at any time! If your property you’re renting is in a flood zone, you may be required to purchase flood insurance depending on the law’s in your state and the rental agreement with your landlord.
The price that you will pay for an insurance policy is based on statistics. This is what is taken into consideration: the safety devices that are installed (fire extinguishers, smoke alarms, locks), the size and the age of the rented property, if you have any pets, the location of the property, your deductible, your credit score, the proximity to emergency services, risks that are present (swimming pools, trampolines) and your claim history or the claim history of your neighbors.
Buying renter’s insurance is always in the best interest of the renter. Nobody wants to walk into their residence only to discover that it was inundated with water and that you won’t be covered for anything. With renters insurance, you can be sure that all of your possessions will be taken care of, and it will also provide you with peace of mind.