When renting a home, the landlord’s homeowners insurance covers the actual home itself as well as some additional liability protection. What it doesn’t protect is your personal belongings, or all of your liability. Whether the landlord requires it or not, it’s well worth the cost.
What does renters insurance cover?
Renters insurance provides three types of coverage:
- Personal property: The cost to repair or replace your belongings, such as your clothes, furniture, or electronics, within your coverage limits.
- Liability: Pays for repairs if you damage someone else’s property, or for medical bills if a guest is injured at your home, up to coverage limits.
- Additional living expenses: If your home is damaged or left uninhabitable, this coverage pays for other living expenses you incur (hotel rooms, restaurant meals, etc).
Your personal property is usually covered in the event of theft, flood, fire, or vandalism. Even if you choose a higher coverage to protect all of your personal property, it’s important to understand that certain kinds of property, like jewelry or coin collections, may still only have limited coverage.
How likely are you to need it?
Many people dismiss renters insurance on the theory that “I’ll probably never need it.” That may be true. But consider the following scenarios:
Hurricanes, floods, blizzards, tornadoes, and earthquakes — no matter where you live, one of these things can and does occur. They can destroy your home and ruin or disperse your possessions all over and leave you with nothing.
Like natural disasters, house fires are incredibly destructive, and not always predictable. You can hedge your risk by adding a set of fire detectors to your security system, but those can only detect a fire, not put it out.
If someone is speeding, driving drunk, texting while driving or otherwise driving recklessly, they could easily drive their car through part of your home. This renders your home uninhabitable and ruins whatever possessions were in the path of the car.
Yes, trees. Trees can appear perfectly healthy before suddenly uprooting and falling on your home.
And that’s just a few things that could leave you needing to replace your possessions and find another place to live, either temporarily or permanently. Ask yourself: Can I afford to replace all of my things and pay for another place to stay out of my own pocket?
Renters insurance may seem like a waste of money at first glance. In the event of a covered event, however, you’ll be glad that you don’t have to pull cash from your pocket to resolve the problems. The peace of mind alone is worth the expense.