A renter’s policy covers your belongings if they are stolen or destroyed, and pays if you are responsible for damage to other people or their property. Renters’ insurance covers catastrophes such as fire, theft and windstorms, but generally does not cover floods or earthquakes. Too many renters think they don’t need liability protection because they rarely have guests or because they believe that the likelihood of someone being injured in their home is almost non-existent. Despite what many renters think, the landlord or management company does not insure them or their personal property.
While homeowners, earthquake and flood insurance can be expensive, renters insurance is comparatively inexpensive. The limits of a renters insurance policy still apply, but the coverage is certainly better than nothing. You only need to take out renters’ insurance if your landlord or property management company requires tenants to have it. No matter how careful a tenant considers themselves to be, they should be very aware of the protection offered by liability insurance.
Anyone living in a college dorm is probably covered by their parents’ homeowners or renters insurance policy. With renters’ insurance, you will have loss-of-use coverage, which covers living costs that exceed normal expenses, such as hotel stays, food, and special transportation you need to continue living until you return home or find a new permanent residence. But even if renters’ insurance is not necessary in your flat, we think that anyone renting the home they live in should take out a renters’ insurance policy. When deciding how much renters insurance is enough, the main decision you will make is to establish the limits of your personal property coverage and your liability coverage.
There are a number of common misconceptions about renters’ insurance that can put renters off buying a policy. Arguably, the lower a person’s income, the more they may need renters insurance, especially liability and loss of use coverages. Renters are solely responsible for insuring their personal property, liability and loss of use expenses. Beyond the obvious coverages and benefits of renters insurance, there are some lesser-known advantages that may convince renters that it is a valuable purchase.
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. Wealthy renters can afford to pay out-of-pocket for liability claims and minor property damage, but in extreme cases, renters may not be insured for the costs of extensive damage to their personal belongings.