What is Renters Insurance & Do You Need It?

Written by Rose Hart

Have you been wondering about renters insurance? How much does it cost?Is it necessary? What does it cover?

The question regarding the need for renters insurance is common among tenants. Every time you take on insurance, it’s also another financial responsibility. As a tenant, you may be wary of a growing number of monthly or annual expenses.

But renters insurance is definitely something that you need to get as a tenant, advises McGuire Management, a property management company in Denver, CO. Without proper renters insurance, there is no financial coverage for your personal items inside the property.

While your rental’s owner holds a landlords insurance policy, this particular insurance policy won’t be useful to you. It’s just there to cover the losses connected to the actual building itself and some potential add-ons.

Let’s see how renters insurance works and list the top reasons you should obtain a renters policy as a tenant. As a result, you can enjoy peace of mind with fully knowing that your personal belongings are financially protected from any loss or damage.

What Is Renters Insurance?
As a tenant, the only way to protect your personal belongings is to obtain renters insurance. A renters insurance plan covers your items from damage like fires or floods.

Some landlords actually set renters insurance as a strict requirement. They add a clause to the lease agreement that states this requirement. Landlords do this to lower the chance of costly disputes. Still want to know more about what renters insurance is this is a great article to help explain it.

What Does Renters Insurance Cover?

Useful Provisions
Regular renters insurance plans have some essential provisions. For instance, you’ll receive financial benefits in the event that a burglar has taken your personal items. However, you would need to prove that you had taken adequate security measures in your rental home.

Additionally, there are many renters insurance policies that allow you to book temporary stays due to unexpected circumstances. But for this to work in your favor, you need to check the limits that your insurance company has set.

Personal Property Coverage
The protection of your personal belongings is a significant benefit of renters insurance. Most standard policies include financial coverage for stolen, burned, or otherwise damaged personal items. But you do need to keep an eye out for this: regular policies fail to cover damages due to natural disasters like floods and earthquakes. This means that if you live in an area that experiences frequent floods, you need to obtain a supplemental policy.

Always read the terms and conditions of your insurance carefully. Before signing an agreement, make sure that you understand the scope and depth of the coverage provided.

Here are some of the typical instances of protection under a standard renters insurance policy:
• Indoor water damage
• Theft or vandalism
• Fires and explosions
• Damage caused by vehicles
• Falling objects

Personal Liability Coverage
Most standard renters insurance policies also carry liability coverage. When any injuries happen in your rented house or apartment, you’ll receive financial protection from liability. Below are some of the ways you can benefit from liability coverage:
• Your neighbor asks to use your bathroom, slips on wet floor, and gets a concussion.
• Your dog bites your guest’s leg, resulting in the need for medical intervention.
• The yard lighting situation is sub-standard and leads to a guest’s injury.

Many of the situations tied to liability issues are impossible to predict. The best precaution is to have valid renters insurance on hand. For instance, typical policies protect you against liability charges for a minimum of $100,000.

At the same time, it’s possible to increase the liability coverage limits. This does lead to paying a higher premium on your renters insurance. If you feel that you live in a high-risk rental, the additional expense may very well be worth it.

Any unique circumstances may raise renters insurance prices as well. As an example, being the owner of a specific dog breed can raise your monthly insurance expense, and some breeds may be outright denied coverage by your insurer.

How much does Renters Insurance Cost?
Renters Insurance is inexpensive. Standard renters insurance policies are generally quite affordable. There are significant differences in the annual expenses between states, but the average renters insurance policy lows are around $130, and the average highs hover around $230.

Obtaining additional riders, extra lines of coverage to your policy, may still make a lot of sense because the premium won’t be that much extra. But the benefits are likely to far outweigh the costs when you consider the associated financial losses. Here are 10 great ways to help keep the cost of renters insurance down.

In a Nutshell: Why You Need Renters Insurance
Renters insurance is an essential policy for all tenants. The personal belongings in your rental home will receive necessary financial protection. Additionally, you can live stress-free knowing that you are covered for injuries or other incidents at your rental, thanks to the personal liability coverage in your policy.

Have questions about renters insurance or your current renters insurance policy? A knowledgeable agent is always a phone call away at Aspen. 303-777-2991.

Author: Rose Hart. Co-Author Marc Goldenberg and Morgan Hatfield, Aspen Insurance Agency.

Disclaimer: This post is to be used for informational purposes only. Each person should consult their insurance or business advisor with respect to matters referenced.