You will only need renters ‘ insurance if your landlord or building requires it. Although not required, anyone renting any type of long-term residence, whether a flat or a single-family home, should seriously consider purchasing a renters’ insurance policy. Like most homeowners’ insurance policies, renters’ insurance covers liability, additional living expenses (ALE) and the cost of repair and replacement of personal possessions. Since the landlord’s policy only covers the cost of damage to the structure of the property, renters insurance provides an additional layer of protection.
The big difference between the two policies is that renters insurance does not cover the cost of damage to the structure of a building. You can obtain renters’ flood coverage from the National Flood Insurance Program or from a private insurer and add earthquake coverage as an endorsement or a separate policy. A renters policy offers financial protection and peace of mind, leaving you less vulnerable to burglary, tornadoes, earthquakes and fires. By investing in renters insurance, you won’t have to bear the cost of potential losses on your own.
Yes, landlords can require renters insurance as a condition of leases in most states (Oklahoma is an exception). And the tenant can be asked at any time to provide proof that he or she has purchased and maintains renters’ insurance. Depending on the insurance company you choose and the state in which you live, you may qualify for discounts on renters’ insurance. Another similarity between homeowners insurance policies and renters insurance is that both provide coverage against losses from fire, theft, windstorm and some forms of water damage.
If a court holds you liable, your renters’ liability insurance will usually cover the costs up to the limit you have taken out, even if the incident takes place outside your home. You can get discounts on renters’ insurance if you set up automatic direct payments from your checking account or pay one year’s premiums in advance. If your TV is stolen or you lose your crockery in a kitchen fire, your landlord’s insurance will not pay for replacement, but a renter’s policy probably will. In this litigious world, one of the main advantages of renters’ insurance is that it can keep landlords out of court.