As a renter chances are you’re already aware of some of the risks associated with your living situation—whether it’s burglaries, fire, water damage, or something else altogether. What you might not be aware of is how to protect yourself against these potential threats without breaking the bank.
That’s where renters insurance comes in. If you’re not sure what renters insurance is or if you need it, let me give you a rundown of why it can be an important part of your financial plan.
In this article, I'll provide an overview of what to consider when figuring out how much renters insurance you need and why—we’ll also be exploring what risks coverage may protect against, and how to save money on the premiums without sacrificing the quality of protection. So don’t risk it! Read on to learn about renters insurance coverage before signing that renewable lease agreement.
Why Do You Need Renters Insurance?
If you're a renter, you may be wondering why on earth you'd need renters insurance. After all, your landlord is probably the one responsible for any damage to the property, right?
Wrong! While your landlord likely does carry some insurance for their property, it won't cover your personal belongings or provide liability coverage if someone is injured in your rental. This means that if someone is injured in your rental and sues you for negligence or if theft, fire, or natural disaster damage strikes, you'll be held personally responsible for those losses without renters insurance.
Renters insurance is an affordable way to protect yourself from those kinds of catastrophic losses. It also covers additional living expenses if ever you need to evacuate for an extended period due to a covered loss. In other words, renters insurance can give you peace of mind that you won't suffer a financial loss should something unplanned happen to your home.
What Does Renters Insurance Cover?
The last thing you want is to be caught without the coverage you need. When it comes to renters insurance, the amount of coverage you opt for should reflect the value of your belongings. That's why it's important to know what is covered by your policy—especially if you’re a renter with lots of expensive items!
At the most basic level, renters insurance covers any damage to your personal property due to a variety of disasters - including theft and fire. In addition, many policies also provide protection outside the home in case covered items are stolen unsupervised away from your residence. And let’s not forget that renters insurance can also provide liability coverage if someone is injured in your residence or if you're held responsible for other people's property damage.
There are generally limits on certain items like furs, jewelry, fine art and collectibles—but it still makes sense to add more coverage for those pricier items if needed. So make sure to review your policy carefully and ask questions so that you don't find yourself in an unpleasant situation down the road!
How Much Are Different Types of Renters Insurance?
Renters insurance is relatively affordable—but how much will it cost you, exactly? It all depends on what kind of coverage you need, and the amount of protection you want.
Standard renters insurance covers losses due to fire, lightning, windstorms, hail, explosions and smoke damage. It also covers theft of property from your apartment or house, as well as vandalism and malicious mischief.
The cost for this type of coverage will depend on your location and the value of your belongings. On average, rates start at about $20 a month for $10,000 worth of personal property coverage and $100,000 in liability protection — although there are plenty of options that offer more comprehensive coverage.
If you want to cover losses due to flooding or earthquakes (or both), you'll likely have to buy additional coverage/ riders. Some renters policies also include special endorsements that offer protection against expensive items like jewelry or sports equipment. Be sure to talk with your insurer about all the different endorsements that they offer so you can get the right level of protection for your needs.
Calculating Your Personal Renters Insurance Needs
When it comes to figuring out how much renters insurance you need, a good rule of thumb is to insure your belongings for what it would cost to replace them. This means including things like furniture and clothing, electronics, and any other items that you want covered in the case of theft or damage.
But what if you want to be extra sure? Here are some additional factors to consider when calculating your personal renters insurance needs:
If you live in an area prone to natural disasters, you may need more coverage than someone who lives in a more low-risk area. Make sure your policy covers the damages that could occur due to natural disasters specific to your area.
Size of Your Household
If there are more people living in your residence, it's likely that the more stuff there is for potential vandals or burglars to take—or for accidents to damage. So if you're living with several people in one space, make sure you account for this when calculating your insurance needs.
Renters insurance can be a great investment, but don't just sign up for the minimum and hope for the best. Take the time to assess your needs and find the coverage that works for you. Calculate the value of your possessions, including any expensive items you may have, and factor in additional coverage for any special circumstances that may require it.
With mostly affordable premiums, renters insurance can give you the financial protection you need in the event of accidental damage, theft, or other loss. Don't take unnecessary risks when you can access affordable coverage—calculate your renters insurance needs and make sure you’re adequately protected.