If you want to rent an apartment or house, you need an renter insurance policy to cover your belongings. Your landlord’s property insurance policy covers the loss of the building itself; whether it’s an apartment, a house, or a two-story apartment.
However, your personal property and certain liabilities are only covered by the tenant’s insurance policy that the tenant who is the tenant must find and pay for. Although 95% of homeowners have homeowners insurance policies, only 41% of tenants have homeowners insurance.
Why do so few tenants have insurance? One explanation is that many people mistakenly believe that they are protected by landlord policies. Another reason is that people underestimate the value of their property. If you only add up the value of clothing and electronic products, you may soon get thousands of dollars.
Another reason that is often overlooked is liability: if someone is injured in your homes, such as a friend, neighbor, or pizza delivery guy, they may sue you. Even if you think you don’t need insurance, there are six good reasons why you should get a tenant’s insurance policy.
1. It’s Affordable
According to the National Association of Insurance Commissioners (NAIC), in 2017, the average renter insurance policy cost was $180 per year (the latest data). Your actual cost will depend on various factors, including how much insurance you need, the type of insurance you choose, deductibles, and residence.
2. It Covers Losses to Personal Property
The tenant’s insurance policy protects your personal property from damage, including clothing, jewelry, luggage, computers, furniture, and electronics. Even if you don’t own too many assets, it can quickly increase your total beyond what you realize. And have to pay more than replacing everything. The tenant’s policy can prevent such a long hazard.
For example, the standard HO-4 policy designed for renters covers personal property damage caused by danger, including:
- Damage caused by aircraft
- Damage caused by the vehicle
- Explosion
- Falling objects
- Fire or lightning
- Riot or civil strife
- Smokes
- Theft
- Vandalism or malicious pranks
- Volcanic eruptions
- The weight of ice, snow, or sleet
- Storm or hail
- Including household appliances, plumbing, heating, air conditioning or fire sprinklers and other water sources or water vapor damage
Losses caused by floods and earthquakes are not included in the standard insurance policy. These dangers require separate policies or additional terms. In addition, a separate rider may be required to compensate for wind damage in areas prone to hurricanes.
Moreover, the tenant’s insurance policy does not cover losses caused by your own negligence or deliberate actions. For example, if you fall asleep with a lit cigarette and fall asleep and cause a fire, the policy will most likely not cover the loss.
3. Your landlord might require it
The landlord’s insurance covers the building itself and the site, but not your property. More and more landlords are asking tenants to purchase insurance policies for their tenants. They hope to see the evidence. This may be the idea of the landlord, or it may be the “order” of the landlord’s insurance company.
The idea is that if the tenants themselves are covered up, certain responsibilities can be transferred from the landlord. If you need help finding or obtaining insurance, your landlord may be able to help.
4. It provides liability coverage
The standard renter insurance policy also includes liability insurance. This will provide protection if someone is injured in your home or you (or another insured) accidentally hurt someone.
It will pay any court judgments and legal fees, but the maximum cannot exceed the policy limit. Most insurance policies provide liability insurance of at least $100,000 and provide relatively small medical expenses. If needed, you can request (and pay) higher coverage.
5. It covers your belongings when you travel
The tenant’s insurance covers your personal belongings, whether they are in your house, car, or on the road. Your property will be compensated for the loss of your property due to theft and other losses you have traveled around the world. Please check your insurance policy or ask your insurance agent to learn more about what constitutes “Other Covered Losses”.
6. Renter insurance may cover additional living expenses
If your house is uninhabitable due to one of these hazards, your tenant’s insurance policy may cover “other living expenses”, including expenses related to temporarily living elsewhere, food, etc. Please check with your policy to understand how long it will pay for additional living expenses and whether it limits the amount the company will pay.
Tenant’s insurance provides insurance for your personal property, whether you are at home, driving, or taking it with you on vacation. In addition, if someone is injured in your home or you accidentally cause injury to someone, tenant insurance will provide liability insurance.
Make sure to understand what your policy covers and ask your agent about available discounts, deductibles, and coverage. For example, make sure you know whether your insurance provides replacement cost insurance (RCC) for your personal property or actual cash value (ACV).
The first type will replace your 15-year-old carpet with a new price at the current market price, while the second type will only compensate for the value of your 15-year-old carpet. Needless to say, RCC is more expensive.
