While renters insurance is not mandatory, it’s a wise choice for any tenant to make room in their budget for the protection it can provide in an emergency.
A couple bucks out of your pocket per month is cheaper than the couple thousand you’ll have to pay to buy a new laptop if it gets damaged or stolen. It’s cheaper than the hotel bill you’d have to pay if your place is deemed unliveable after a fire or flood and you need to stay in a hotel for a week. And it’s much cheaper than the hundreds of thousands of dollars you’d need to cover legal and medical costs if someone got injured on your property.
What is renters insurance?
Many renters think their belongings are covered by their landlord’s home insurance or specific landlord insurance coverage.
Neither is the case.
Home insurance and landlord insurance will protect the landlord and the landlord’s property, not you and your own things. So, should something go wrong with the house (like a break-in or a fire), their insurance will make them whole again – but unfortunately, not offer any protection for you.
That’s why renters need renters insurance. It covers the cost of replacing and/or repairing your personal property so you don’t have to pay the full recovery costs out-of-pocket.
What coverage do you get with renter’s insurance?
Personal possessions are all the things you bring with you to your new place: furniture, clothes, technology, kitchenware, jewelry, etc. Should any of your items be compromised by a fire, theft, flood, vandalism or most weather-related incidents, renters insurance would kick in and help cover the costs to repair/replace.
Personal liability coverage
The personal liability portion of your renters insurance coverage would provide you with money if you’re sued by someone for injuries sustained in your place. As we discussed in the piece about landlord insurance, a lawsuit could also (or instead) be directed at your landlord, depending on the circumstances of the injury, where it happened and why. Plus, this coverage provides protection if you cause damage to the property you’re renting.
If, for almost any reason, you can’t stay where you are because it’s deemed unfit to live, the emergency accommodation section of your renters insurance policy will come through with money to cover additional living expenses for your accommodations while repairs are made or until you find a new place to call home.