Although not mandatory, anyone renting any type of long-term residence, whether a flat or a single-family home, should seriously consider purchasing a renters‘ insurance policy. But wealthy renters also need renters insurance as a way to mitigate the financial cost of damaging and unexpected events. In this article we will answer some common questions and dispel some misconceptions about who is responsible for purchasing renters insurance. In addition to personal property coverage, renters insurance provides liability coverage for injuries or damage you may cause to others.
Below are some examples that demonstrate that renters insurance is often a useful purchase and well worth the investment, regardless of who you are. The limits of a renters insurance policy still apply, but coverage is certainly better than nothing. Some landlords or rental agencies may require you to take out renters’ insurance before you move in, so it is a good idea to check your lease carefully to see what is expected of you. Both tenants and landlords need insurance to cover their individual property in the event of an accident or emergency.
Although more and more landlords and building management companies are requiring tenants to have renters’ insurance, most people are not required to purchase it and choose not to purchase a policy. For most tenants, renters’ insurance is an invaluable tool to protect them from potentially devastating financial consequences. Too many renters think they do not need liability protection because they rarely have guests or believe that the likelihood of someone being injured in their home is almost non-existent. When deciding how much renters insurance is enough, the main decision you will make is to set the limits of your personal property coverage and your liability coverage.
Landlords can make renters insurance mandatory to limit the risk of being sued by tenants for personal property damage or liability costs. Wealthy tenants can afford to pay out of pocket for liability claims and minor property damage, but in extreme cases, tenants may not be insured for the costs of extensive damage to their personal belongings. In the event that your flat or home is deemed uninhabitable due to covered smoke damage, for example, you would be forced to pay out-of-pocket for any expenses that exceed your typical spending levels if you did not have renters insurance.