The cost of housing makes it impossible for many people to purchase a home of their own. This makes renting a place the only realistic option available. If you’re renting a home, you’ll need an insurance policy to cover your belongings. A landlord’s property insurance policy covers losses to the building itself. Your personal property and certain liabilities, however, are covered only through a renter’s insurance policy that you, as a tenant, have to find and pay for. Here are 6 good reasons to get renter’s insurance.
What is renter’s insurance?
Renter’s insurance is also called tenant’s insurance. It pertains to the insurance policy that protects the tenant from certain perils that might affect his or her personal property. The owner of the home you are renting is liable for the whole building or property. You, as the renter, are responsible for your personal belongings. The owner would not be accountable for the loss and damage to them.
Choose the right coverage amount
Renters insurance is designed to cover the cost of replacing your belongings in the event of an accident, theft or natural disaster. Keep in mind that renters insurance doesn’t just cover your personal property. Your policy should also include liability coverage. Liability coverage protects you if someone is injured or their property is damaged while they’re at your home.
Know what isn’t covered
Be sure to ask for a complete explanation of what is and isn’t covered before picking an insurer. Generally, renters insurance covers a wide range of circumstances but certain situations may not be covered. For example, some insurance excludes coverage for damage caused by earthquakes or floods.
Understand the different types of coverage
When you’re buying renters insurance, you need to decide whether to get an actual cash value policy or a replacement value policy. When evaluating the value of the damaged property, an actual cash value policy considers factors such as depreciation and normal use. With a replacement value policy, depreciation and wear and tear aren’t a factor in determining an item’s worth. The insurance company pays the claim depending on how much a similar item would cost at current market value.
A deductible is an amount you have to pay out-of-pocket before your insurance company picks up the tab. Choosing a higher deductible means that you’ll have to pay more upfront if something happens to your stuff but your monthly premiums will be lower.
6 good reasons to get renter’s insurance
The average renter’s insurance policy is relatively affordable. Your actual cost will depend on factors, including how much coverage you need, the type of coverage you choose. Moreover, the amount of your deductible, and where you live also determine the cost of your insurance.
2. Covers personal property
Protects you from risks that could cause damage to your personal possessions. A renter’s insurance policy protects against losses to your personal property, including clothes, jewellery, luggage, computers, furniture, and electronics.
Your landlord’s insurance covers the structure itself and the grounds, but not your belongings. A growing number of landlords require tenants to purchase their own renter’s insurance policies and they’ll expect to see proof.
4. Liability coverage
Standard renters insurance policies also provide liability protection in the event you or members of your familiar cause injury to others or damage their property. It also pays for damage your pets cause.
5. Covers belongings when you travel
Renter’s insurance covers your personal belongings, whether they are in your home, car, or with you while you travel. Your possessions are covered from loss due to theft and other covered losses anywhere you travel in the world.
6. Additional living expenses
If your home becomes uninhabitable due to one of the covered perils, your renter’s insurance policy may cover additional living expenses. These may include the cost associated with living somewhere else temporarily, food, and more.