Most homeowners invest in homeowners’ insurance. They understand that it is crucial to secure themselves in the event of damage or loss of their personal belongings and assets. However, the case reverses when it comes to renting a house. As per a survey, only 37% of tenants have renter’s insurance. The figure is dismal considering the liabilities they are taking upon themselves.
People generally don’t opt for renter’s insurance because they think the homeowners’ insurance will cover them if anything unfortunate were to happen. However, they realize how grave a mistake it was when they have to pay from their pockets.
Read ahead to know more renters’ insurance.
What is renter’s insurance?
Renter’s insurance policy is designed to cover the expenses of a tenant in the case of unfortunate incidents. A homeowner’s insurance only covers the building and not what’s inside the house. Any damage or loss of your personal or the homeowner’s belongings becomes your liability once you rent the space.
Depending on the policy you choose, you will be covered against theft, break-ins or a visitor’s injury. There are basically three types of coverages that renters insurance policy may provide.
- Personal Property – This type of coverage will cover the expenses of your personal belongings, such as your clothing and electronics. Of course, your policy limit will define the amount you can recover in such a scenario. Like other insurance policies, you will have to select the deductible while buying this type of renter’s insurance. If you are unsure of the right amount of coverage, you can discuss it with your insurance agent.
- Liability – This coverage type will secure you against the repairs if you happen to damage your home owner’s property. Moreover, this type of insurance policy will also cover your expenses if a guest gets injured, and you are held accountable for it. For instance, your dog may bite someone, or your guest may fall off a wobbly staircase.
- Additional living expenses – This type of insurance policy will cover your hotel and food bills if an incident makes your place inhabitable. It could be anything like fire or flood that may cause damage to your place.
Does it help if your roommate has renter’s insurance?
Unfortunately, your roommate’s policy will not cover you. It may help you with the expenses for repairing the property but not for the loss or damage to your personal belongings. A few companies offer a policy for multiple roommates but it is better to buy your separate one. During an unfortunate incident, your roommate may make several claims that may increase your rates.
How much coverage do you need?
Well, it may seem simple enough. However, when you think about the money you would require to replace all your stuff, you may be in for a surprise. Some house owners require their tenants to buy renters insurance worth $100,000. It is advisable to safeguard yourself with the same amount even if your landlord is not adamant about it. You can invest between $30,000-$50,000 if you rent an apartment.
It is a good idea to prepare a list of everything you own. Once you have made the list, you may also put a value against the articles. It will also help to take photos and videos of everything you possess. If that is not possible, at least take the photos of the more valuable items like jewelry, silverware and electronic items. That way, you will be able to manage any disputes later on.
How much do you need to pay for buying a renters insurance policy?
For all the convenience and peace of mind that renters insurance brings to the table, they come pretty cheaply. For instance, a $30,000 policy with $100,000 of liability, you may have to pay between $10-$15 in a month. That is pretty affordable, right?
To save on some costs, you can contact your regular insurance company for some discounts. Prices also vary by state and location. You may even check with your insurance agent to help you with the best deal there is. It is advisable to ask as many questions while buying a renters agreement to ensure that it is the right policy for you.