Yes, You Really Do Need Renter’s Insurance. Here’s Why

As the number of apartment-dwellers continues to increase, many find themselves wondering if renter’s insurance is a necessary expense. If you want to ensure that you protect the value of your possessions in case of disaster, it’s important to consider insuring your belongings if you lease your space.

Renter’s insurance — sometimes called HO4 insurance — is the only way to recoup the expenses of disaster, pay for accidental harm caused to others on the property, and ensure a financial safety net if you find yourself in need of a new place to stay. Typically, renter’s insurance is available for such a low monthly cost, there aren’t many reasons not to get it.

From coverage to finding the right option for you, we will take a look at some of the things you need to know when you’re thinking about insuring your apartment or other residential rental.

Why Would I Want Renter’s Insurance?

It is common for people to have homeowner’s insurance policies to cover their buildings, personal items, and liability to visitors. In rental situations, landlords have insurance policies for their buildings, but that protection does not extend to any of the tenant’s possessions, or activities for which the tenant may be held liable.

If you’re renting, your possessions are likely not insured unless you have your own renter’s plan. That’s why landlords highly recommend — and sometimes require — tenants get a renter’s insurance policy.

What Does Renter’s Insurance Cover?

For each insurer, what is covered and what is not may differ. If your landlord mandates coverage, it is important to check what must be covered before choosing an insurance provider. Generally, these expenses are covered by a traditional plan:

- Personal property such as computers and jewelry (usually up to a set amount detailed in the policy)

- Living expenses if the property becomes unlivable (food, hotel costs, transportation)

- Liability coverage to others (if, for example, your pet destroys another’s property)

- Medical expenses of individuals injured in the rented space

- Fraudulent purchases that are a product of theft from the covered property

To be prepared, it is important for renters to make a list of their property in the rented space so they know exactly what personal property they have. When calculating the value of your belongings afterward, it is easy to miss items.

If you have particular unique or high-value items, take photos of them so that they can be identified or appraised if necessary. And as a general rule, be sure to have high-value items appraised professionally and properly stored.

It is also important to take note of what is not covered by insurance. Most policies do not cover harm done intentionally. A typical insurance policy covers loss due to theft, vandalism, water damage, fires, or other situations out of the renter’s control with key exceptions.

Most policies will not cover loss or harm due to floodwaters, mud slides, nuclear hazards, or earthquakes. If you think that the property is at risk of these events, contact an insurance agent about what you can do to protect your belongings.

How Much Coverage Is Enough?

To figure out how much coverage is necessary for you, it’s important to thoroughly consider the worth of your belongings when added together. Additionally, consider how much liability insurance may be necessary in case of an accident to another person or their property.

For most renter’s policies, it is standard to have at least $30,000 in coverage for personal loss and $100,000 in liability protection. If you think that you have more valuable items that you would like coverage for, talk to an insurance agent about tailoring your coverage to you.

Is Renter’s Insurance Worth the Expense?

For most people, insurance will only cost around $10-$15 a month. Although deductibles may vary, protection will help renters recoup the value of their destroyed items, as well as help cover unexpected expenses that come with moving quickly. For renters, the low monthly bill is well worth the value of the coverage and peace of mind that these plans offer.

For renters, insurance provides coverage for their belongings and for liability in case of accident or disaster. With a low monthly bill, these policies can pay in dividends if it is necessary. While it is not always mandatory, renters benefit from protecting their property.

When looking for the right coverage for you, consider the value of your items, the risks of the particular property, and how much you are willing to pay each month. Unless you have the means to cover the value of all of your possessions, emergency housing, and the bills for harm done to any visitors, renter’s coverage is a necessity to protect yourself financially.