Renters insurance is a type of insurance designed to protect renters and their personal property. It also defends them from financial liability in the event a claim is made against them by a third party for bodily injury or the damage/destruction of their property. If a landlord does not make renters insurance a condition of their rental agreements, it may be tempting to forgo the added cost of insurance. However, renters insurance offers significant benefits that protect the financial futures of anyone living in rented accommodation in the U.S. So, is renters insurance worth it?
What Renter Insurance Covers
The reason for the low take-up of renter insurance is often due to a lack of understanding of what it really covers. In many ways, renters insurance is similar to homeowners’ insurance for Americans who own their own homes.
It is a shield against financial disaster if the renter is sued or their accommodation is rendered unlivable. Most renters will never need to use it, but if a catastrophe does strike it will be there to limit any financial damage incurred.
Personal Property Damage
The primary protection offered by renters insurance is cover for personal property damage. It is estimated the average renter has possessions valued at between $20,000 and $30,000. If that property is stolen, damaged or destroyed by a covered peril, such as a house fire or vandalism, renters insurance will cover the losses. The coverage limits can be adjusted according to the policyholder’s needs.
Additional Living Expenses
All renter insurance policies will provide a list of covered perils. These covered perils will always cover the most common worst-case scenarios that may befall a renter. A major house fire or storm damage are just two common covered perils.
In the event a property is rendered uninhabitable, renters insurance will provide coverage for costs above normal expenses. For example, if it is necessary to relocate to a hotel or the renter has to move back home and deal with costlier commuting costs, the policy will provide for these additional living expenses.
If a third-party individual suffers bodily injury or property damage while they are on the property, they may attempt to claim costs from the tenant. Without renters insurance, all associated legal fees and settlement costs must be paid out-of-pocket by the tenant. Renters insurance protects your financial future by covering the costs if liability is proven.
The standard coverage amount for personal liability is $100,000. Many landlords will demand this cover from their tenants as a minimum to shield themselves from any potential liability.
The medical expenses portion of a renters insurance policy is designed to cover minor medical costs for guests who are injured in a rental property. Coverage is usually set at just a few thousand dollars. By offering to cover minor medical expenses, tenants can potentially avert long and costly lawsuits.
Renter Insurance Is Affordable For Unexpected Costs
Renters insurance is more affordable than other similar types of insurance, such as homeowners’ insurance, because the insurer is only covering the policyholder’s belongings and providing them protection against the costs of liability.
Some may argue that renters insurance is largely a waste of time because the vast majority of renters will never need it. This is true, but if something does happen it can cost tens of thousands of dollars to resolve.
Renters insurance is notoriously cheap for the level of protection it offers, with many policies costing no more than a few hundred dollars per year. It is one of the best-value insurance policies there is, which makes it a smart investment for any renter.
Make Sure To Pick The Appropriate Coverage
Paying for an inappropriate amount of coverage either leaves tenants insufficiently protected or indicates they are paying too much. Most tenants purchase renters insurance for the personal property protection cover. It is common for tenants to either undervalue or overvalue their personal property. This is why all tenants should take a personal inventory and come up with rough estimates of their total value.
For example, if a tenant owns an aggressive dog breed, the risk of being held liable for bodily injury is higher. It can be quite a complex subject, so it is strongly recommended that tenants consult with an experienced renters insurance agent before deciding on the best available policy.
Talk To The Insurance Experts About Is Renters Insurance Worth It
Renters insurance is often misunderstood, which is why so many tenants remain unprotected in the U.S. For a policy with the right coverage limits for you, do not be afraid to speak to a professional first. Contact the renter insurance experts at Merchant Family Agency to find out more about these policies and how they can help you.