Renters Insurance 101: 3 Reasons Why You Should Have It
Do you rent your home? If so, you are not alone. In fact, the percentage of Americans renting their homes is the highest it has been in 50 years. Today, more than 110 million people live in renter-occupied households, which is an increase of 17.3% since 2006.
Many renters are left unprotected, however, because only about 41% purchase renters insurance. This means that if there is a fire or some other kind of unforeseen event, renters could lose everything, and many wouldn’t have the means to replace these items. There is good news, though, because renters insurance is very affordable and it can provide protection in the event of a loss or liability claims. Companies like Mercury Insurance offer coverage for as little as 35 cents a day, and it can even extend to personal items in your vehicle.
So, if you are one of the tens of millions of Americans who don’t have renters insurance, here are three reasons why you should consider purchasing this very affordable protection.
1. Theft and Vandalism
Imagine any precious or valuable items in your home or vehicle that can be easily removed or damaged. All of your personal belongings, such as electronics (TVs, tablets, computers or mobile phones), jewelry and collectibles (stamps, comic books or baseball cards) could be covered by renters insurance. Without renters insurance you would not be protected in the event of vandalism or theft for any items taken from your home or vehicle.
A real life example of the importance of renters insurance can be found in San Francisco, which experienced a 26 percent increase in reported car break-ins in 2017 despite efforts by the local police department and city supervisors to increase foot patrols and quicken responses to reported break-in calls.
2. Covered Perils
Renters insurance provides coverage for a variety of events, such as fire, lightning, hail, smoke, sudden and accidental plumbing leaks, and even falling objects, like satellites or meteors. If any of these events were to happen to your rental property, causing extensive damage to the structure and your personal belongings, coverage would apply to your personal belongings less any deductible you may owe. Renters insurance may also provide compensation for your living expenses if your rental property becomes uninhabitable due to a covered loss. Be sure to keep copies of your receipts for your insurance adjuster if this is the case.
3. Liability Protection
Liability protection could help cover claims and legal expenses for damages to others or their property for which you are found legally responsible.
Examples could include things like a visitor that trips and falls down the stairs of your rental property and is injured, or damages caused by your child throwing a ball through the window of a neighbor’s house or car.
What if my landlord already has insurance for the property?
A common misconception is that renters insurance is unnecessary if your landlord already has insurance for the property. Unfortunately, your landlord’s insurance policy will not cover any of your personal belongings in the event of a loss, and it won’t provide liability protection if a lawsuit is brought against you. Although renters may not be responsible for repairing the home in which they are living, in the event of a covered loss, there’s always a chance their possessions and valuables will need to be replaced if they are damaged or stolen.
Also worth considering is that in today’s rental market, especially in California, which has a homeownership rate typically 10 percentage points below the national homeownership rate, you may find that it is a requirement for tenants to purchase renters insurance (which typically includes a minimum of $100,000 of liability coverage).
Is there anything renters insurance doesn’t cover?
Your insurance provider might not offer coverage for earthquake or flood damage to your personal property through renters insurance. Additional exclusions, exceptions and limitations may also apply, so it’s always a good idea to speak with an agent before you purchase if you have questions.
Renters insurance provides financial security to cover an extensive number of unexpected and unforeseen events, and can be readily obtained for an affordable cost. Speak to your local insurance agent to learn more about your coverage options and eligible discounts.