If you owned rental property, you would do everything you can to protect the property and the income it generates. This is why most landlords have landlord’s insurance for their rental properties.
Similarly, if you were a homeowner, you would have homeowner’s insurance to protect you from damage to your home or loss of the belongings inside the home.
But, what if you are a tenant living in a rental property, how would you protect yourself against the loss of your personal property? In the event that something happens in the rental property where they live, most tenants do not have any insurance protection.
This means that if an event occurs which damages the landlord’s and tenant’s properties, the property owner can expect the insurance company to pay but the tenant has nowhere to go, explains Windermere Management in Spokane.
This is why tenants need renter’s insurance. What is renter’s insurance and how can it benefit you?
A renter’s insurance policy is designed to offer protection to people living in a rental property in the event of a loss. It ensures that if there is a theft, fire, or similar incident you do not have to bear the cost of replacing your belongings. Renter’s insurance protects your belongings under a wide range of circumstances and from several damaging events, including:
- Damage due to fire, theft, vandalism, malicious mischief, smoke, lightning, electrical or malfunctions
- Damage caused by falling objects, aircraft, vehicles, riots, civil commotion, explosion or volcanic eruption
- Damage due to weight of ice, snow or sleet, windstorm or hail
- Damage caused by water/steam from sources in your home
In plain language, what can renter’s insurance do for you?
- Protection against loss of personal property
If your clothes, furniture or electronics are lost through theft, fire, or other events, the insurance company will repair or replace them. The policy will either pay the cash equivalent of items or it can buy you a new one.
- Protection from personal liability
If someone is accidentally injured in your apartment and you are found responsible for the injuries, the policy will protect you. It will pay your liabilities and cover the injured person’s medical bills, up to a certain limit. The policy also protects you against personal liabilities if another person’s property is damaged inside your apartment.
- Pays your additional living expenses
If the building where you are renting is damaged and becomes uninhabitable, the policy will cover the cost of living somewhere else temporarily. Many tenants wrongly assume that the landlord is obligated to provide alternative accommodations. This is not true.
- Protection while you travel
Even when your property is lost or damaged away from your home, the insurance policy still protects you. If your belongings are destroyed or stolen while they are in your car or when you are traveling, your renter’s insurance policy extends coverage to such incidents.
Why most tenants don’t have renter’s insurance
The truth is that most tenants – as much as 69% – do not have renter’s insurance. Why is this? If renter’s insurance is so valuable, why don’t more tenants have it? Here are the reasons why many tenants, and you, possibly, do not have renter’s insurance.
- They undervalue their belongings
Most people assume that their items are not valuable enough to need insurance cover. In other words, they assume that their belongings are easily replaced. This is false. And it is only when people lose their belongings and are forced to replace, that they realize how much stuff they own
- They think they are co-insured
Some tenants presume that because their roommate is insured, they too must be protected under the same policy. Only the actual person who takes out a policy is insured by it, not even if you are contributing some money toward the payment of the insurance premiums.
- Renter’s insurance is expensive
Most people view renters insurance the same way that they view other forms of insurance; they think it costs a lot. But this is incorrect; renter’s insurance rarely cost more than $30 a month.
As a matter of fact, most policies will cost between $200 and $300 a year, which comes to less than one dollar a day. Think about it, for less than one dollar a day tenants easily get insurance coverage worth thousands of dollars. There is no excuse for not having renter’s insurance.
What to know when buying renter’s insurance
Now that you know the value of having renter’s insurance, there is only one thing left. Not all of renter’s insurance provide equal value. When buying renter’s insurance always chose a policy that provides the replacement cost (Replacement Cost Value – RCV) of items, versus their cash value (Actual Cash Value – ACV). RCV policies pay you enough to buy a new item, but ACV policies give you the cash equivalent of the lost item, which may only be enough to buy a used item.