Who needs renters insurance?

Updated: Apr 27


Typically, anyone not covered by a homeowner's insurance policy should have a renters insurance policy. If you are unmarried and reside with a domestic partner or are a boarder in a residence where you pay rent, it is unlikely that you are protected under the homeowner's insurance policy or another renter's policy for property or liability protection. There are exceptions when you reside with a parent or a close relative. To be safe, get your own policy.

Renters insurance covers your expenses you can't afford

If you cannot afford to pay for unexpected damages, renters insurance is the way to go. It will cover unexpected costs related to property damage or legal liability at limited additional cost. Here are some examples of unexpected, unforeseen expenditures:

  • Catastrophic fire

  • Legal liability for damages such as your dog biting a neighbor

Remember this; renters insurance equals peace of mind.


Always shop for renters insurance

Not all renters insurance companies are the same. Get quotes from different carriers, as some may provide you with a better price for almost identical coverage. The price depends on a variety of factors, including your location and insurance claims history, but not all use the same methodology. Trying other carriers could save you several dollars a month.


Coverage limits

People misjudge the value of their possessions, which affects the amount of renters insurance they purchase. Personal property drives the cost of a renter's insurance policy. But, you want to make sure you are not overpaying for coverage or underpaying and leaving yourself exposed. For personal liability, most tenants are adequately covered by standard limits.

If you underestimate the value of your possessions, it may lead you to a more affordable price, but it will not fully cover you in a worst-case scenario. Or, if you overestimate the value of your possessions, you overpay for unnecessary coverage. Here is a tip. Add up everything that you own and take personal inventory. This process will help you estimate how much property coverage you need.

Our recommendation is to purchase at least $100,000 in personal liability coverage., It usually comes standard with most policies. This number covers the liability exposure of most tenants. If you need to increase your limit to $300,000 or $500,000, it only costs a few extra dollars per month. This is a prime consideration for people with a higher-liability lifestyle, or with more aggressive dog breeds.


Deductible

Your deductible is the amount of money you will pay out-of-pocket when making a claim. A higher deductible lowers the cost of your policy. For example, a plan with a $250 deductible might cost 20% cheaper than one with a $1,000 deductible. If you need to save money now, it might be worth choosing a higher deductible to lower the premium of your renter's insurance.


Discounts

Larger insurers with many policy options may offer an auto and renters insurance bundle, saving you anywhere from three to ten percent on your premium. Be aware of safety features in your apartment, such as central burglary and fire alarm systems, can be huge savings as well. Investigate whether an insurer provides these discounts.

Valuable Items

There is limited coverage for expensive items such as jewelry, fine arts, collectibles, and guns on the standard renter's policy. These items can be scheduled on the policy to be insured for their full value for an additional minimal premium.


Personal Liability Protection

Your child leaves a skateboard on the sidewalk and a visitor trips and falls and suffers an injury. This injury would not be due to negligence of the property owner, but of you, and therefore you would be held legally liable if the person decided to seek compensation for injuries. The landlord would be responsible only if the damage was caused by something directly related to the property itself, such as a slip and fall on uneven pavement or because of a loose railing. In this case, we hope that you have renter's insurance because you are going to need it.

Another scenario:

What if, while playing a game of golf, your ball goes astray and strikes a bystander or another player, causing injury? The liability portion of your renter's policy would provide coverage in this case.


Medical Payments Coverage

If someone is injured on the property and seeks medical attention, this coverage pays for medical treatment, regardless of negligence. Your renter's insurance policy would cover the medical expenses as a result of the injury, up to the limits of that coverage.


Loss of Use

If a covered loss and uninhabitable damage your apartment or rental unit for some time while repairs are being made, this coverage pays the additional expenses incurred for your temporary residence, above your regular monthly rent and costs. This coverage is a percentage of the amount of personal property coverage on your policy.

WRITTEN BY

Steve Leach

CEO and Co-Founder of linqrs mobile app, The Most Clever Way to Shop for Insurance. Former Insurance Agency Owner, College and NFL football coach.

linqrs is downloadable in the Google Play and the App Store.