Benefits of Renters Insurance

From replacing personal belongings to shielding against liabilities, renters insurance is affordable for tenants to buy for peace of mind. It safeguards your cherished furniture, precious heirlooms and essential electronics and offers landlords who require it a sense of security. Recognizing the importance of renters insurance is the first step towards safeguarding your personal belongings from potential perils.

• Six Benefits of Renters Insurance
• Do You Need Renters Insurance?
• How Much Renters Insurance Should You Get?

Renters insurance offers you financial protection, shielding you from the burden of replacing your belongings out of pocket if disaster strikes. Whether it's a favorite piece of furniture, electronics or precious belongings, renters insurance can help cover your valuable items.

Renters insurance covers the repair or replacement of your possessions in case of a fire, wind or theft. In particular, renters insurance can cover your:

• Clothes

• Appliances (refrigerators, washing machines, etc.)

• Electronics (speaker systems, TVs, etc.)

• Furniture (sofa, dining room tables, etc.)

• Artwork

• Sports equipment

Your policy can also cover stuff you tote around in your car, like CDs, clothes or car tools. If a thief decides to snag your laptop or clothes while you're out and about, you can count on your insurance to cover it.

Even if you have pricier items, like jewelry or fine art, a chat with your agent or insurer could highlight options for endorsements or special coverages that provide the proper protection.

Renters insurance has two types of liability coverage: personal and medical payments — both of which can foot the bill if a guest is injured or property is damaged.

• Personal liability coverage will pay for the costs of accidents if you are at-fault.

• Medical payments coverage will pay for the medical expenses of anyone injured on your property, no matter who is at-fault.

For instance, if your pet accidentally bites a guest, renters insurance covers their injuries. This way, you can avoid any costly medical expenses. However, renters insurance does not cover personal injuries — which means if you are sued for libel, slander or defamation, your policy will not pay for any legal fees.

If your rental unit becomes uninhabitable due to a covered accident, renters insurance can pay for any additional living expenses until you can return. Whether you require a short stay in a hotel or a temporary rental for an extended period, your additional living expenses (ALE) coverage is intended to cover these costs. Some expenses you can file claims for include:

1. Hotel or motel charges while your rental home is being repaired or rebuilt.
2. The cost of temporary rental accommodation if you need to live elsewhere for an extended period.
3. Restaurant meals or increased food costs due to lack of kitchen access.
4. Laundry or dry-cleaning costs when you don't have access to your washer or dryer.
5. The costs associated with moving into temporary accommodations and then back into your rental home.
6. Storage fees to keep your belongings safe during repair or reconstruction.
7. Transportation costs if your temporary accommodation is farther from work or school.
8. Cost of installing utilities in your temporary accommodation.
9. Increased telephone or internet costs at the temporary accommodation.
10. Pet boarding if pets cannot stay with you at your temporary accommodation.

Some landlords might require renters insurance as part of your tenant agreement for their own security. This is because a renters insurance policy is beneficial not just to tenants but also to landlords. In particular, renters insurance helps landlords by:

• Ensuring a tenant's personal property is protected against damages  

• Potentially reducing dwelling insurance premiums for landlords

• Screening applicants' financial stability

• Offering a sense of security for landlords

The average cost of renters insurance is $13 per month or $159 per year — a small price to pay compared to the cost of completely replacing your belongings in case of a covered loss. However, remember that your actual costs can change depending on your coverage, location, deductible amount, credit score and more.

If the worst happens to your rental unit — be it a fire or theft — renters insurance can help you cover the costs. This means you won't have to dip into your savings or emergency funds. Renters insurance is there to shoulder the financial burden and provide you with peace of mind, knowing you won't be left high and dry when faced with an unexpected incident.

While it's not legally required, getting renters insurance is a financially prudent step for any tenant. After all, renters insurance is more than just a policy; it's an investment in your future security. Consider these scenarios: a fire ravages your home, or a burglar makes off with your belongings. In the face of these challenges, do you have the financial means to replace these items out of pocket?

The total worth of all the items you've accumulated over the years might be greater than you realize. From cookware to computers, the cost could easily exceed $35,000. Hence, considering whether you need renters insurance becomes vital, as it can serve as a safety net and provide a sense of security. This is why opting for renters insurance is a smart move. You'll know you're protected even in the face of the unpredictable.

How much renters insurance you should get depends on your needs. Before buying rental insurance, it's important to take a good, hard look at your property's worth before zeroing in on a policy. Get personal property coverage limits that can replace the full value of your belongings — from your clothes to your appliances. However, it's worth noting that high-value items like jewelry may have individual sub-limits and may not be fully covered. Spend some time understanding the nitty-gritty of personal property coverage before you make your choice.

In terms of liability coverage, the industry standard is $100,000, but you can easily increase this to get an extra layer of security. For instance, it might be worth considering coverage of at least $300,000 or $500,000 if you frequently have guests over — and it would only cost a few dollars more each month.