Most people think insurance for your domicile is strictly for homeowners. It only makes sense that you need homeowners insurance, to not only compensate you from damage to the house, but to protect against liability if someone gets hurt on your property. But renters don’t need that, because when you rent, the property belongs to the landlord — so it’s their problem, right?
Not necessarily.
First of all, if something happens to your apartment — a fire, an earthquake, catastrophic water damage — you’re not going to receive compensation for lost or damaged belongings unless you have insurance. Insuring your valuable personal property is a sound idea whether you own your home or not. Second of all, while landlords might be liable for some things that happen on the rental property, there are other things they are not liable for. You are.
With that in mind, let’s take a look at renter’s insurance and how it can help protect you from lawsuits.
What Is Renter’s Insurance?
There are three basic types of renter’s insurance: personal property, liability, and additional living expenses.
The first type is meant to cover costs of replacing or repairing lost or damaged items during what are called “covered perils.” Covered perils can include things like break-ins, fire, or people getting injured while on your rental property.
Speaking of injuries, liability insurance is meant to cover expenses such as medical bills if someone gets injured while in your apartment, or if you accidentally damage someone else’s property.
Additional living expenses are for situations such as a fire or flood, where you may have to vacate your rental property and stay in a hotel until your rental is livable and available again.
Unlike homeowners insurance for properties with a mortgage, renter’s insurance is not compulsory. You don’t have to take out an insurance policy as a renter — although, as with any other insurance, you are running a certain amount of financial risk by passing up on it.
How Renter’s Insurance Can Protect You from Lawsuits
To understand how renter’s insurance can shield you from lawsuits, let’s first break down what liability insurance for renters covers. This coverage applies if something happens on the property and you’re found liable; i.e. you failed to protect the injured party from a preventable accident or mishap.
Liability renter’s insurance covers situations such as:
- Your pet, such as a dog, bites or injures a guest while on your property, incurring medical bills.
- If someone is working on your apartment and is injured by something foreseeable.
- If someone slips and falls in your apartment, due to a wet floor, broken railing, faulty stair, and so on.
Here are some things liability insurance does not cover:
- Liability insurance will not cover you if you injure another party who lives in the same apartment with you. Your health insurance might cover some of that, but renter’s insurance will not cover accidents where one inhabitant is found liable for injuring the other.
- If you run a home business, renter’s insurance will not cover any of the common scenarios. You must instead get dedicated business insurance, which will cover the same scenarios under a different umbrella.
- While renter’s insurance will cover some personal property even if it isn’t in your apartment at the time (such as valuables being stolen from your car), it will not cover you if property damage or injury is caused by the use of your car. That will be covered by your car insurance instead.
By now, you can probably see how renters insurance can keep a lawsuit from breaking your bank or even driving you into bankruptcy. If someone — be it a friend, a worker, or a random guest — gets injured on your property somehow, and you’re found liable, there’s a good chance renters insurance will cover some of those expenses. With the cost of health care being so high, it just makes good financial sense to get some liability coverage in case the worst happens.
Finding the Best Renter’s Insurance
Now that you know what renter’s insurance can do for you, here are a few tips on how to get the best renters insurance for your money:
- Shop around and compare. Not all insurers are alike, and rates and policies can vary wildly. Don’t take the first policy you find!
- Know your budget. Renters insurance doesn’t have to leave you financially strapped – according to Ross Martin at The Zebra, the average monthly premium for renters insurance is anywhere from $15 to $31. But be sure to take a look at your deductibles, too… that’s where the bigger potential expense will lie.
- Know how much coverage you’ll need. Are your personal belongings worth $50,000 in coverage? $100,000? It pays to have a good estimate ahead of time.
- Check the online reviews to see what people are saying about the insurance company in question.
