Is Renters’ Insurance Really Worth It?

Roof on fire

By Jade Rich

If you are one of the 104.5 million people who live in a rental unit in the United States, it is imperative to be aware of your rights and responsibilities. For example, many people erroneously believe that their landlord’s property insurance covers their personal belongings in the event of a fire or flood, but this is not entirely accurate. Instead, you are required to obtain renters’ insurance if you want to make sure that you will never be put into the awful position of losing everything that you own due to a weather-related incident or the negligence of another renter.

A shocking 66 percent of renters are not currently covered by their own insurance policy, and the primary culprit behind this minimal level of protection seems to be a lack of understanding. For example, many people will refer to the myth that renters’ insurance is expensive as their reason for not buying it. However, industry statistics indicate that the average monthly cost is only $12 per month.

This basic level of renters’ insurance protection typically offers approximately $30,000 in property coverage, and it includes $100,000 in liability coverage. You can also add a larger amount of coverage for a nominal fee, and the vast majority of people who opt for a more extensive renters’ policy do not pay more than $25 monthly.

With that in mind, there are several good reasons to consider a renters’ insurance policy. Here are six compelling reasons to consider:

#1: Your Landlord Has No Legal Obligation to Help Out

If your apartment burns down tomorrow, your landlord has no legal obligation to help you or any other renters with the replacement of damaged or destroyed property. Additionally, they do not need to help you find a temporary place to stay, and they also typically have the legal right to void the rest of your lease term. However, if you have renters’ insurance, you can get assistance with replacing your lost belongings, and you will also have your temporary living expenses covered.

#2: Coverage for Your Mistakes

Anyone can make a mistake that could lead to a flooded apartment or a kitchen fire. To make matters worse, you can be held legally responsible for the damage that you cause to the landlord’s property. In other words, you won’t get a chance to debate hardwood vs. carpet in the living room, and instead you may have to pay to replace whatever flooring the landlord chooses. You could even end up being sued by any other renters who are hurt or lose property due to your negligence.

#3: Protection from Theft

No insurance policy can stop you becoming a victim of theft, but your renters’ policy will enable you to replace your items if someone breaks into your apartment. There are almost 2.2 million burglaries every year in the United States, and the average loss is $2,096. Therefore, even if you have a $500 deductible, you can still dramatically reduce your losses after a break-in if you are protected by renters’ insurance. And as an added bonus, your renters’ policy even covers theft of your personal belongings that takes place outside the home.

#4: Assistance with Disasters

Not all natural disasters are covered by every renters’ policy, but it is common for these policies to protect your belongings during a fire, snowstorm, explosion, lightning strike, electrical surge, smoke, and certain types of water damage.

#5: It Will Help You Avoid Financial Issues

Some people falsely assume that their items are not worth insuring, but this is not the case for almost every renter. After all, if your annual policy costs $150 and your deductible is $500, you would only need to lose $650 worth of stuff for your policy to be worthwhile. Unless the value of all of your belongings is actually less than $650, you need to have renters’ insurance. Also, do not forget that a renters’ policy will help you with liability issues.

#6: Protection from Injury Lawsuits

It’s important to note that if a visitor hurts themselves due to a building or property defect on the rental property, your landlord can be held responsible for their medical bills. Unfortunately, you cannot use your landlord’s property insurance if someone is injured due to an issue that you caused in your apartment. A prime example would be an injury that was caused by your television set falling on someone’s leg. The liability coverage portion of your policy will cover the bills associated with this injury up to your limit, which is usually at least $100,000.

As you can see, signing up for renters’ insurance is a smart move. An increasingly large number of apartment communities are making it mandatory to have one of these policies, but you should not wait for anyone to force you to buy it. Instead, take responsibility for your future by acquiring a renter’s policy as soon as possible. Keep in mind that many companies that offer automobile insurance also have options for renters, and this could even save you money due to a multiple policy discount. With the average renter having at least $20,000 worth of belongings, it makes absolutely no sense in most situations to decide against this affordable insurance option.

Jade Rich is a freelance writer and Social Services Director who currently lives in the Northeast Atlanta area. She has been a frequent renter in the past and gained valuable rental’s insurance know-how during her first tenancy in an apartment.  

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