Blog

How do I know if I need renters insurance?

Do you currently rent an apartment or home? If the answer is yes, then you need renters insurance. It’s really as simple as that. Renters insurance is critical for anyone, and we can’t stress this enough to young people who often overlook this important insurance. Renters insurance is the only way to protect yourself from losing your belongings in the case of an emergency. Today, we’re going to share some more information about renters insurance to help you understand the value of this insurance.

 

Do I need renter’s insurance?

The simplest way to determine whether you need renters insurance is to evaluate whether you could afford to replace everything you own. Sound daunting? If you could not afford that expense, you would benefit from renters insurance.

According to a recent survey, nearly 56% of renters believe that their landlord’s insurance will cover their belongings in the event of a disaster. This dangerous misconception results in many tenants choosing to forgo coverage. The truth is, landlord property insurance will only cover the structural elements of the dwelling. Even if structural damage results in harm to your personal property, you won’t be reimbursed by your landlord’s insurance provider. For example, if a pipe bursts above your living room and damages your furniture, your landlord’s insurance company would only pay to repair the resulting damage to the building and, not your personal belongings like your couch and electronics.

 

What does renters insurance cover?

Renters insurance, also called tenants insurance, covers the repair or replacement of your personal property and provides the additional funds you might need to relocate during the restoration process. Additionally, renters insurance often includes medical and personal liability coverage. This means that if someone is injured in your rental, your policy might cover their medical expenses, and/or the cost of a lawsuit if you are sued after the accident.

Every policy will have different sub-limits and exclusions, so it’s important to carefully review your policy with your agent. For example, your policy might include coverage for dog bites, provided that your dog is not categorized as a high-risk breed. In this case, if you wanted to guarantee coverage for Fido, you would need to declare your pet.

 

How much coverage do I need?

Before selecting a policy limit, take the time to realistically assess the value of your possessions. Most renters insurance policies start at $10,000 worth of coverage, but your policy limit could be increased to whatever amount is necessary to protect your belongings.

Accuracy is critical at this stage, and you may wish to contact a professional appraiser. Remember: if you undervalue your belongings, you could find yourself unable to replace them in the event of a disaster. However, if you overvalue your belongings, you’ll be paying unnecessarily high premiums.

You’ll also need to determine a policy limit for your additional living expenses. In the insurance industry, ‘additional living expenses’ is the term for the amount of money you would receive if you are forced to temporarily relocate. To select your coverage limit, research the cost of furnished living spaces in your area comparable to your current home. That information will help you choose a policy limit that would allow you to maintain your standard of living. For more information on additional living expenses, you can review our guide to the topic.

 

How much is renter’s insurance every month?

In Los Angeles, this standard renter’s insurance policy is relatively affordable. Major insurance carriers often provide discounts for bundling. Consider contacting your auto insurance providers to discuss their renter’s insurance rates, if applicable.