If the question keeping you up at night is, ‘do I need renter’s insurance?’, the answer is probably YES. Depending on the terms of your lease agreement, your landlord or property management company may be requiring you to carry Renter’s Insurance. Even if it is not something that is required, it is always a recommendation and we’d like to share why.
Similar to a homeowner’s policy, renters’ insurance is also split into two sections: Property and Liability.
When renting, the tenant obviously does not own the building. Therefore, the building itself would be insured by the property owner and the covered property you would be insuring by purchasing a renter’s policy would be your personal property or the contents of your home.
Ask yourself a serious question: how much would it cost you to replace everything you own? Your clothing, furniture items, electronics, even the little odds and ends like kitchen blenders, hair driers, and alarm clocks. The point is – it all adds up, and it adds up quickly! This amount can vary by individual but according to US News, the average 2-bedroom apartment contains $30,000 worth of stuff!
In the event of a covered loss such as fire or theft, renter’s insurance would cover the costs to replace your destroyed, damaged, or stolen belongings. Without renter’s insurance, the property owner’s policy would not provide any coverage for your personal belongings as a tenant of the building. In that situation, you would unfortunately be financially responsible for replacing all your own things.
In addition to insuring your personal property, Renter’s insurance also provides liability coverage. This can apply to damages you are liable for to the property or the property of other tenants around you. For example, if a box catches fire on top of your stove and damages your unit and the property of others in surrounding units. Liability also covers the cost of any medical bills or legal fees you could be held responsible for. For example, if someone falls and is injured while visiting inside your home or if your dog were to bite someone.
Typically, a renter’s policy comes with $100,000 in liability coverage, which may seem like a big number but that can be exhausted quickly in the event of significant damage or a serious injury. The cost to increase that limit can be minimal, and your insurance agent can help you review your options and the costs associated with them if you would like to increase the liability limit.
Again, much like a homeowner’s policy, coverage for special items such as engagement rings and firearms would have to be scheduled onto a renter’s policy. So, when your insurance agent is asking you what all you own, rest assured that they are not being nosey. They are simply trying to adequately account for your items.
When reviewing renter’s insurance options, it is never a bad idea to ask your agent to provide an auto insurance quote for your review as well. The combination of an auto and renter’s policy would allow you to qualify for a multi-policy discount if it made financial sense to place both policies with the same carrier.
Coverage You Can Count On
Now that we have explained what it covers and why we think it is necessary for every tenant, we will share some tips on how one can obtain it. The information your insurance agent needs to provide a quote will be your personal information and some basic information on the building itself. Starting with the address and then they will ask the number of units, square footage you are renting, if the building is sprinklered, approximate building age, construction style and some basic questions along those lines to provide an example.
There can be some underwriting variables by building as mentioned above, but on average renter’s insurance can typically be obtained for as little as a couple hundred dollars a year. Which is a small cost compared to the thought of replacing $30,000 worth of personal property.
As always, if you have any questions or would be interested in more information, members of your local WalkerHughes team would be happy to help!