If you’re moving into a new place or even your first place, you might be thinking, “Do I need renter’s insurance?”. While it’s sometimes easier to skip out on a. precautionary renter’s insurance policy, there are many reasons you should get one. We’ll break down why it’s different from a landlord’s insurance policy and how much you can expect to spend on your own.
Is renter’s insurance required?
Depending on your landlord, renter’s insurance may be a requirement. Some landlords require it to protect the property from any damages. Requiring renter’s insurance also makes it easier for landlords to offer pet-friendly apartments. Read your lease carefully to see if you need to get on a renter’s insurance plan before move-in day.
How is renter’s insurance different from a landlord’s insurance?
A landlord’s insurance policy typically only provides coverage for structural damage to the building that may happen in a rare occurrence such as a fire or natural disaster. However, this does not cover the renter’s personal property. So if a fire does destroy a building, the landlord’s insurance will cover the physical apartment, but not personal belongings within the apartment.
Landlord insurance also doesn’t cover damage that you cause to the building by accident. So if you start a fire in the kitchen or accidentally leave the water running in the tub making it overflow, you will be responsible for repairs, not the landlord. The landlord’s insurance policy typically also does not cover loss through robbery and vandalism.
Renter’s insurance gives the renter and the landlord an extra layer of protection and assurance. Without it, renters may end up with a large financial burden or in litigation with their landlord, disputing over who should cover what costs. For this reason, landlords are increasingly requiring tenants to have renter’s insurance either as terms of a new lease or a clause added to a lease renewal.
How Renter’s Insurance Benefits Renters
Renter’s insurance is more than just another added cost of renting an apartment or a home; it is a way to properly guard your assets and ensure you are a serious renter.
Other benefits include:
- Personal property protection: This type of insurance will pay for, or help replace, personal belongings that traumatic events, such as fire or floods, destroy. In many cases, renter’s insurance extends beyond the apartment and will protect your property in situations outside of the home. For example, if someone steals your phone from your car, the renter’s insurance will cover it. It’s important to go through your assets when determining what level and type of renter’s insurance to buy.
- Limited liability: Think of this type of insurance as a way of protecting you from any lawsuits that may arise from an accident in your apartment regarding a guest or other occupant. This is especially true if you have an animal. A rental insurance policy can help mitigate the risk caused by pets on your property. For this reason alone, many landlords won’t even allow renters to have a pet without renter’s insurance.
How much renter’s insurance is necessary?
Landlords usually require renter’s insurance in the form of a provision in the lease agreement that will state how much coverage the renter needs. A $100,000 liability limit is typical, although the landlord may require more. As this is a contractual issue, it is usually up to the discretion of the landlord, not the renter. Landlords should consider coverage, deductibles, and coverage limits when deciding on how much renter’s insurance to require, as this will affect the premiums they pay for a policy.
Can you buy renter’s insurance on your own?
Landlords can include renter’s insurance as part of the rental contract, with the landlord choosing the company and policy they prefer renters to have. Or a renter can purchase their own renter’s insurance pending approval from their landlord. In this scenario, landlords may want to see official documentation of the renter’s insurance policy, or they may just trust that the renter has what they claim. Another option is listing the landlord as an additional interest on the policy. This way the landlord is aware when the policy is lapsed or canceled.
How much will renter’s insurance cost?
Renter’s insurance is generally inexpensive. On average, policies cost less than $20 a month, although this will vary from state to state. Some renters even qualify for discounts depending on the insurance company, state they live in, and credit score. Also, ensuring the home or apartment has basic security precautions like smoke detectors, locks, and fire sprinklers can help save money on the policy. A healthy credit score may also improve the cost of renter’s insurance, resulting in lower premiums.
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