Ask most homeowners if they have homeowners insurance, and the majority will say they do â€“ after all, mortgage lenders require them to have it. But ask your average renter if he or she has renters insurance, and chances are youâ€™ll get a very different answer. According to a 2015 poll conducted by the Insurance Information Institute, only 40 percent of people who rent their homes have renters insurance policies â€“Â as opposed to the 95 percent of homeowners who have homeowners coverage.
Though some landlords require proof of renters insurance upon signing a lease, itâ€™s easy to dismiss it as an unnecessary expense when you donâ€™t own the place youâ€™re renting. But while you may not be liable for the roof over your head, youâ€™re still liable for everything you own inside your rental â€“ from your clothes to your computer to your pets. Here are five reasons why protecting your home and possessions with renters insurance is totally worth the money.
Most renters insurance policies will run you around $15 a month, which is far less than most of us spend on coffee every 30 days. Itâ€™s also a whole lot less than what youâ€™d pay to replace your stolen computer, bike or flat-screen TV. Renters insurance does come with coverage limits, however, so itâ€™s a good idea to figure out ahead of time what is and isnâ€™t covered by the insurance policy you pick. If youâ€™re on the fence about shelling out that $15 every month, keep in mind that if you donâ€™t think you can afford renters insurance, you probably canâ€™t afford notÂ to have it.
Your Belongings Are Covered â€“ Even When Theyâ€™re Not in Your Home
If someone breaks into your rental unit and steals your belongings, you canâ€™t expect your landlord to help you replace those items (unless you can prove that your landlordâ€™s negligence led to the break-in). The same goes for damage resulting from fire, flooding and other natural disasters. Not only will renters insurance cover these types of costs, it will also reimburse you the same amount whether something was stolen from your home, your car or out of your bag at the gym. Depending on the type of policy you have, your renters insurance will either pay the actual cash value of what your property is worth or cover the cost to replace it.
It Covers Third-Party Damage
Not only does renters insurance cover damage to your apartment that you or some other event are responsible for, but it also typically covers repair costs for damage you caused to a third party. Letâ€™s say your toilet overflowed while you were away on vacation, ruining your floors and the ceiling of the apartment beneath yours. Chances are, your renters insurance policy would cover the cost of repairs for both.Â
It Covers Hotel Stays in Case of Emergency
If you live in an inclement weather zone like Florida, thereâ€™s a good chance that a hurricane, flood or tornado could shut you out of your home for days or weeks at a time. If your rental unit is rendered uninhabitable because of damages from a natural disaster, the cost of a hotel would likely be covered by your renters insurance. Depending on the insurance policy, you may even be able to get your hotel stay covered if your building management turns off the utilities for a couple of days to make repairs.
Youâ€™re Covered if Someone Gets Hurt in Your Home
How many times have family members or friends had an accident in your home? Maybe they took a shower and slipped on the wet bathroom floor. Maybe they burned themselves cooking in your kitchen. Or maybe your dog panicked and bit them. You may not have realized it, but if someone suffers an injury while in your home, youâ€™re technically liable for their medical costs. Youâ€™re also responsible for their legal costs if they decide to file a lawsuit against you. But if you have renters insurance, you donâ€™t have to worry. Your policy will cover these types of expenses.