Top 5 Reasons to Get Renter's Insurance
If the home you live in is rented, you need renters insurance. Perhaps you have heard this before or not, but buying renters insurance is going to be one of the smartest financial decisions you will ever make as a renter, says NC Group. What is renters insurance and why is it so important?
What is renter’s insurance?
To help you understand renters insurance, I will first explain a few things about how homes are insured. There are two main types of insurance coverage that a home can have: homeowners insurance or landlords insurance.
Homeowners insurance is for homes where the owner of the property is also the occupant of the home. If your parents own the home they live in, this is probably the kind of insurance coverage they have. This kind of insurance policy has some unique qualities that define it.
Homeowners insurance not only covers the physical structures of the home if those structures are damaged, but it also covers the belongings of the people who live in the home. This means if you, your parents, or your siblings’ belongings are damaged, the policy will pay for the losses.
This is why when living in your parent’s or relative’s home, no one is ever going to ask you to get a separate insurance policy for your belongings. The homeowner’s insurance policy for the entire property also protects your things. But things are a little different when the home is a rental property. Rental properties are insured using what is known as landlord’s insurance. Unlike homeowners insurance, landlords insurance is very selective in the kind of coverage it provides for the contents of the building. A landlord insurance policy will only pay for losses that affect property belonging to the owner of the building. This means if there is a fire or burglary in the rental property, the insurance policy will not pay for any damage or losses suffered by the tenants in the home. Basically, in a rented home your belongings are not protected by your landlord’s insurance. Your landlord’s property – the building and his or her items inside it – are protected, but your items are not. As a renter, the only way to ensure your stuff is protected is to get renters insurance. Renters insurance is a policy designed for the insurance needs of people who live in a rented home. Since they cannot take advantage of the landlords’ insurance policy and are not eligible for homeowners insurance, renters insurance is the only way to ensure renters are not uninsured.
5 reasons why you should buy renters insurance
Personal property coverage
The first reason to get renters insurance is to make sure your belongings are protected in the event of theft, loss, or damage. Renters insurance will cover your belongings if they are lost or damaged by any peril listed under the policy. The recognized perils include common dangers that your belongings may be exposed to. Examples of covered perils are fire, theft, smoke, vandalism, civil commotion, falling objects, electrical fires, explosions, damage by vehicles, and much more.
2. Protection from personal liability
Renters insurance will protect you from personal liability if your neighbor, friend, or a random stranger is injured inside your rented home and you are found responsible for the injury. It will also protect you if your dog attacks someone within the premises. The policy also applies if you borrow someone’s item and it is damaged or stolen in your home. Renters insurance will pay your lawyer’s fees, the injured person’s hospital bills, and any legal claims against you.
3. Additional living expenses
If something happens to make the home you are renting uninhabitable, renters insurance will pay for your additional living expenses. This applies in cases where, for instance, a tree falls on the house and damages it.
In the period when the home is undergoing repairs, you must arrange to live elsewhere, but the landlord will not be responsible for providing that alternative accommodation. Without renters insurance, you will be forced to pay the additional living costs out of pocket.
4. Personal property coverage while traveling
The personal property coverage offered by renters insurance is not limited to belongings within the confines of your rented home. If you are traveling in an eligible country and your belongings are lost, damaged, or stolen, renters insurance will also cover the loss. This is also true for items that are left inside your car, if the car is broken into and the items are stolen.
5. Renter’s insurance is affordable
Considering the benefits of renter’s insurance, you would expect the policy to be expensive. But renters insurance is one of the most affordable insurance policies. The annual premium for renters insurance is $120-$240. This amounts to less than $1 a day; not as much as what most people spend on coffee daily. But for this token amount you get coverage that is worth tens of thousands of dollars.