Considering that personal property coverage is one of the main drivers of the cost of a renters insurance policy, try to choose the right coverage limits. Just as your renters’ policy covers your belongings when you are travelling, it will usually cover them when they are stored somewhere other than your own home. Most renters insurance does not cover your roommate’s belongings unless you both share a policy, which not all states or insurance companies allow. Most insurance companies offer discounts if you combine auto and renters insurance policies, or if the flat has a security system, smoke detectors, or deadbolts.
Most renters insurance does not cover flood damage, so you will have to pay for repairs yourself or buy separate flood insurance if your home is at risk. It is easy to misplace a necklace or watch while travelling and these items may also be more susceptible to theft (and theft is covered by renters’ insurance). If renters’ insurance is the only reason you allow pets, you may want to make sure that your tenants’ policies cover pet liability. 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.
Despite what many tenants think, their landlord or management company does not insure them and their personal property. We recommend that you check your state and local laws before adding a clause requiring renters’ insurance to your lease. The alternative of insuring yourself with your own funds may be feasible, but having a renters insurance policy could save you considerable money in the event of a disaster. Purchasing renters insurance is always a good idea, whether you can afford to cover unexpected expenses or not.
You only need to purchase renters’ insurance if your landlord or property management company requires tenants to have it. Beyond the obvious coverages and benefits of renters’ insurance, there are some lesser-known advantages that may convince renters that it is a worthwhile purchase.