Whether you’re renting an apartment or a whole house, you may have heard of a product called renters insurance.
Renters insurance is designed to protect the property of people who rent properties rather than own them. This type of coverage can pay for replacement or damage to your personal property, liability in case someone is injured while visiting you, or for temporary housing in the event that your rental is destroyed in a fire or other disaster.
Since it’s an added expense – and your landlord has insurance, anyway – many people wonder if they really need renters insurance.
Yes, You Should Purchase Renters Insurance
Some landlords do require their tenants to purchase renters insurance. This is to protect the landlord as well as the tenant.
However, even if your landlord doesn’t require you to purchase renters insurance, you should purchase a policy for yourself.
What Happens If I Don’t Have Renters Insurance?
If you don’t have renters insurance, hopefully nothing negative happens. But, if you suffer a property loss, someone gets bitten by your dog, or you can’t live in your apartment for a while because of a fire, you will have to pay for all the related expenses out of your own pocket.
This could get quite expensive, especially if you own a lot of pricey items such as jewelry, electronic equipment, or sports equipment.
And, if you own a dog that bites someone, for example, compensation for their medical treatment and other items would be paid solely by you.
Your landlord’s insurance won’t cover you or your property in situations such as these. Their insurance covers damage to the rental property itself, not any of your property or any situations for which you would be liable.
How Much Renters Insurance Do I Need?
The answer to this depends on how much property you have.
For those who don’t have a lot of personal effects or whose property isn’t particularly expensive, a fairly basic amount of coverage should be sufficient. However, if you do own more property or the things you own would be expensive to replace if lost or stolen, you want to purchase more coverage.
Most renters insurance policies begin at around $5,000 of coverage and go up to the hundreds of thousands of dollars. Take an inventory of your personal property with estimated replacement costs, and round up to the nearest $10,000.
Additionally, consider purchasing personal liability coverage on your renters insurance, at least $100,000 if you can swing the cost.
Even though that sounds like a lot of money to pay for that kind of coverage, most renters insurance policies are fairly affordable. On average, renters insurance costs about $15 per month, a small price to pay in the event that something happens.