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Why You Need Renter’s Insurance

by Ryan Guina

If you have a mortgage on your home you are probably required to have homeowner’s insurance, which is there to protect not only your home and your possessions, but the bank’s investment as well. But if you rent a home or an apartment, you may not be required to have any form of insurance, which could be one of the most expensive mistakes you ever make.

If you rent a home or apartment, you should purchase a renter’s insurance policy. At $10-15 per month, renter’s insurance is an inexpensive way to protect your items and insure them against loss or theft, and potentially protect yourself against liability.

Renter’s Insurance Tip: Even if you don’t think you have a lot of “valuable” possessions, you still need renter’s insurance. Why? Because the items you have in your home are probably more valuable than you think, and renter’s insurance is a very expensive way to protect them.

Why You need Renter’s Insurance

When you rent a home or apartment, the building you are living in is probably insured by the owner. But that insurance is there to strictly to protect the landlord and his building, not your possessions or potential liability. The building will be covered if there is a fire or other damage that was not caused by a tenant, but the items you have will not be replaced if they are lost or damaged unless you have your own renter’s insurance policy.

What does renter’s insurance cover?

The first thing renter’s insurance does is protect your possessions from fire, theft, vandalism, damage, and some natural disasters (you may need to purchase a separate earthquake or flood insurance policy; check with your insurance agent and thoroughly read your policy coverage before signing). If there is a fire that destroys the building and you lose all your belongings, they should be covered if you have renter’s insurance.

You renter’s insurance policy may also cover items that you have away from home, such as a laptop or camera you take with you on vacation. Be sure to read your policy because some renter’s insurance policies include full replacement cost of the lost, damaged, or stolen items.

Renter’s insurance may cover liability

Some renter’s insurance policies include a liability clause, protecting your interests if you cause an injury to another party, or cause damage to another person’s property. For example, you may be covered if your child is playing in the bath tub and they run the water over and it ruins your floor.

Your policy may also cover you if you have a kitchen fire and the entire building burns to the ground. Not only will it pay for your items, but it may also cover any repairs that need to be made and the other tenant’s property. Without it, you would have to pay for everything yourself.

Renter’s insurance may also cover injuries that may happen inside your home or apartment. An injury can be caused by slipping on a wet floor, falling down the stairs, or anything else. It’s better to pay the fees to have the coverage than it would be to pay for the hospital bills that come after an injury.

How much renter’s insurance do you need?

Rates and policies vary, so before you sign up for a generic renter’s insurance policy, make sure you get the coverage you need. The easiest way to do this is to perform a home inventory and document all you possessions. Then you can add up their value. Chances are you will be surprised at their replacement value. This is the amount of renter’s insurance you should buy. Chances are you will be surprised at their replacement value.

Renter’s insurance is generally inexpensive

Most renter’s insurance policies are inexpensive. I paid roughly $10 a month the last time I had renter’s insurance., and it’s not uncommon to see similar rates in the $10-15 per month range. Rates will vary depending on your policy, location, amount of coverage, additional riders, and other factors, so it will pay to shop around. You can usually save money on your renter’s insurance policy by bundling your insurance with the same company, for example check with the company that you have your auto insurance with.

You should be able to get renter’s insurance through most companies that offer homeowner’s insurance policies, so check there if your car insurance company doesn’t offer it.

Protect yourself

Insurance is the best protection for your possessions and potential liability, and because renter’s insurance is so inexpensive, it is one of the best deals out there.


Published or updated March 14, 2011.
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1 Hank

Renter’s Insurance is a great deal and a must for people to cover your possessions. One thing that I found out though was that my policy did not have enough coverage for my wife’s jewelry. We had to get an additional rider to cover it. The Rider is inexpensive as well, but it could be a detail that is overlooked if you do not read the fine print of your renter’s insurance policy.

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