What is Renter's Insurance and Why Do You Need It?

What is Renter's Insurance and Why Do You Need It?

By Linda Einfrank, Sterling Property Solutions

People living in a rental property often own a lot of stuff, but very few of them realize just how
much stuff they actually own. That is because those things are bought little-by-little over a long
time, and their owners do not realize just how much they have acquired in personal possessions.
But the available data puts the estimated worth of the average renter's personal belongings at

This includes basic stuff like Smartphones, laptops, furniture, clothing, designer handbags, TV,
home theater, microwave and other appliances, paintings and d├ęcor, glassware and china, as well
as, jewelry. If important personal documents are also added, the value of a renter's belongings
will be far more than $20,000. But the question is; who is responsible for insuring a renter's
valuable possessions?

Most renters do not realize the risk that their personal belongings are exposed to. This is because
they often assume that because their possessions are housed in someone else's property, that
person's insurance also covers their belongings. A lot of renters wrongly believe that since their
landlord has insurance and they are paying to live in the property, they are also covered by the
policy. But this is simply not true.

Landlords insurance only provides protection against loss and personal liability for the holder of
the policy, that is, the property owner. If an incident happens, which results in the loss or damage
of both the landlord's and tenant's belongings, only damage to the building and landlord's
belongings will be paid for by the insurer, explains Sterling Property Solutions. The renter is on
their own unless they have renters insurance.

What is renter's insurance?

Renter's insurance is a policy designed to cater to the specific needs of people living in rental
property. Since tenants are not eligible for homeowners insurance or covered by landlords
insurance, renters insurance helps ensure tenant's belongings are adequately insured. It protects
tenants from many adverse events that can happen in a rented place, such as:

- Damage to the tenant's belongings due
- Loss of personal possessions
- Protection from personal liability

Why you should buy renters insurance

Here are a few of the benefits offered by renters insurance and why you should buy a renters
insurance policy today.

Protection against loss of personal property

Some of the personal belongings covered by renters insurance are laptops, Smartphones,
bicycles, jewelry, clothing, furniture, kayaks and home appliances. And they are protected from
loss or damage as a result of theft, fire, storm, lightning, falling objects, volcanic eruption,
electrical surges, wildfire, civil unrest, riots, vandalism and a host of other perils.
Depending on the policy, renters insurance will pay the replacement cost value (RCV) or actual
cash value (ACV). The first will buy a new item, while the second will pay for a used item.
Protection from personal liability

If someone visits your apartment - friend, neighbor or delivery guy - and they are injured,
renters insurance will apply if you are found personally liable for the injury. It will pay the
injured persons medical bills and any money awarded against you, to a certain limit.
Renters insurance will also protect you if you unintentionally hurt someone inside your
apartment. You are also covered if you accidentally leave the water running in a plugged sink,
and it overflows and damages your apartment or the building.

Protection against loss of use

If you are unable to live in your rented apartment but have to stay in a hotel temporarily, renters
insurance will cover the additional living expenses. This is for situations where a rented property
becomes uninhabitable due to storm, fire, smoke or similar event.

Many tenants think if they cannot live in their rented home; the landlord is responsible for
providing alternative accommodations. This is usually not the case. Without renters insurance,
the tenant must pay out-of-pocket to live elsewhere, but renters insurance can help you avoid

Protection against theft from anywhere

If you are traveling within a state or country that is included in the policy and your belongings
are stolen, renters insurance will cover for the loss. Also, if your parked car is broken into and
the things you left in it are stolen, the policy will cover you in that situation.

Furthermore, if your credit card or check-book is stolen during a break-in and the thief runs up
fraudulent charges or writes a forged check, the policy will protect you. Additionally, if
someone's property that you borrowed is damaged in your home, you will be covered.

Renters insurance is affordable

Finally, compared to the number of perils it protects you from, renters insurance is dirt cheap.
The average yearly premium is less than $200. This means that for less than a dollar a day, you
can sleep in peace, knowing that your personal belongings are safe.

This is far less than most people spend on a cup of coffee every day. And the benefits of renters
insurance outweigh the benefits of coffee by far. This is why there is no reason why you should
not get renters insurance today.