VOLUME 5R9 Reasons Renters Insurance Is a Necessity
By Jonathan Pressman
Photo credit: Luke Southern/UnsplashHomeowners insurance won’t cover a renter’s belongings in the event of a fire, burglary or robbery, flood, or any other personal liability. Unfortunately, renters too often find this out after the fact. In fact, in a past report from the Insurance Information Institute, only 36% of renters had renters insurance.

This leaves renters scrambling after an unfortunate accident. Here are nine reasons that renters need to fix this immediately.

Photo credit: Ani Kolleshi/Unsplash1. Fire or Smoke Damage
A renters insurance policy will pay to repair or replace any personal belongings damaged by fire or smoke. Fire and smoke can spread quickly in a home, wreaking havoc on clothing, furniture, electronics and more.

While a landlord’s fire insurance policy will cover the structure of the home and anything permanently attached to it, renters will need to carry a separate renters insurance policy for coverage of their personal property inside of it.

2. Water DamageLike damage caused by fire or smoke, a renters insurance policy can cover water damage to a renter’s personal property caused by a busted pipe or leak. Water can be highly destructive. According to the Federal Emergency Management Agency (FEMA), just one inch of water can cause $25,000 in damage to a home.

Renters need to be careful when it comes to insurance coverage for water damage claims. While certain causes of water damage are covered under a standard renters insurance policy, there may be specific exclusions, like flooding. To purchase coverage for water damage from flooding, renters can buy a separate flood insurance policy from the National Flood Insurance Program (NFIP).

3. It’s a Requirement in the LeaseWhile there aren’t any laws requiring renters insurance in Florida or Texas, a landlord can include a renters insurance requirement as part of the lease terms. Landlords can even mandate coverage that meets certain minimums, such as $100,000 liability limits and $35,000 in personal property coverage. Renters who want to purchase additional liability or personal property coverage can do so.

4. It Can Only Be Purchased Before It’s NeededInsurance can’t be purchased after something goes wrong, which is another reason for tenants to purchase renters insurance right away. Renters who try to buy insurance to file a claim after the fact may be charged with fraud.

5. It’s Inexpensive
Renters insurance is one of the less-expensive types of insurance coverage. Renters in Florida and Texas can expect to pay around $15–$16 per month on renters insurance. However, these prices can vary slightly and will increase with added coverage limits, endorsements or lower deductibles.

Photo credit: Monstera/Pexels6. Coverage for Injuries to Visitors
Renters insurance can cover the cost of medical bills to visitors injured on the premises of a renter’s home. If a visitor gets injured while in a renter’s home, the renter could be found liable and held responsible for the cost of medical treatments and legal fees.

7. Protection Against Losses from Theft
If a burglar steals or damages a renter’s personal belongings, renters insurance can help replace any missing or broken items. Some renters insurance policies limit their coverage for certain types of personal property. For example, a renters insurance policy might only pay for up to $500 of jewelry, even if losses exceed that amount. Other items with limited coverage include cash, cameras, art, antiques, furs and firearms.

Renters should carefully review the terms of their renters insurance policy with a licensed insurance agent. Renters who want to purchase additional coverage for specific, more valuable items may want to consider a personal articles floater.

8. Protection Against Losses from Windstorms and Hail
If renters’ belongings are damaged in a windstorm or from hail, a renters insurance policy will typically cover these types of weather-related losses. Since renters coverage is only for the renters’ personal property and liability, a damaged roof or any damage to the home itself would only be covered under the landlord’s insurance policy.

However, renters insurance won’t provide coverage for damage to their car (though it may pay for damage to items inside the vehicle if they are considered personal property). Renters who own a car need to carry a separate auto insurance policy, which will cover the vehicle itself if it’s damaged from windstorms and hail.

9. Potential Savings When Bundling with Auto Insurance Policy
Some insurance companies will offer special pricing for customers who have both a renters insurance policy and an auto insurance policy. For renters who already own a car, it may be worth comparing discounted rates to opt for the same company for both.

Though it won’t be included in the declarations pages, a renters insurance policy can provide renters with some much-needed peace of mind. Renters insurance is a low-cost way to protect renters from costly losses due to liability claims or damage to their personal property. While some landlords will require renters insurance as one of the terms of the lease, it’s a good idea for every tenant to purchase renters insurance and shield themselves from unexpected financial losses.