Why do you need renters insurance?

Key Takeaway
This in-depth guide from Homebody highlights the significance of renters insurance for securing your belongings and preserving your financial security in rental apartments or homes. Although it is not necessarily required, most people find renters insurance a necessity to provides peace of mind by covering your personal property, liability concerns, and additional living expenses in the event of unforeseen losses or damages.

You got an apartment, and you are very excited to have a roof over your head. That's something to be excited about.

But, when renting an apartment or home from a landlord, you should take out an insurance policy. 

Like car insurance or life insurance, renters insurance covers you from certain types of monetary losses, so you get additional peace of mind.

And, you see the reasons for yourself in this guide by Homebody.

However, renters insurance does add extra money to your monthly bill. For many, that extra payment could be too much. 

So, why do you need renters insurance, is it worthwhile, and is it ever mandatory? Today, after reading this comprehensive piece by Homebody to the end, you will find peace of mind.

What is Renters Insurance?

Renters insurance protects your property and legal liability from unexpected losses or damages within or around rental properties. 

For example, if your rental apartment is broken into and $700 worth of equipment is stolen, you could get some or all of that cost reimbursed by your insurance company if you have renters insurance.

Renters insurance is sometimes but not always mandated by landlords – the idea is to protect tenants against unexpected financial losses that might cause them to leave an apartment lease they previously signed. 

However, renters insurance is oftentimes a decision that each individual tenant must make.

Most standard renters insurance policies cover a handful of different losses and damages through various coverage types.

Personal Property Coverage

Personal property coverage protects you against the theft, damage, or destruction of personal belongings in your apartment or home. 

In most cases, a standard renters insurance policy includes coverage for:

  • Clothing
  • Electronics
  • Tools
  • Furniture
  • And more

However, every individual renters insurance policy covers different types of personal property. 

Personal property coverage protects you against theft or fire damage in most cases.

For instance, if your rental home burns down and it is not your fault, you could get some or most of those costs reimbursed if you buy renters insurance.

Personal property coverage only exceeds a certain amount, like with most insurance policies. 

You can opt to take out a more expensive or less expensive policy depending on how much money you want to be covered.

Liability Coverage

Liability coverage protects you against personal liability and medical bills if someone is injured in your rental home.

Assuming you invite a guest to your rental apartment for the first time. They trip and fall, accidentally breaking a bone. 

They try to blame you for the accident. If you are found liable, personal liability or medical protection coverage could reimburse you for the medical bills you are on the hook for.

Generally, medical protection covers any expenses for the injury under $2000. 

However, as with personal property coverage, you can take out a more or less expensive policy that covers you for more or less medical bills. 

This policy also covers unexpected damages or injuries caused by a pet, usually a dog.

Homebody offers this insurance package. Get a quote now.

Additional Living Expenses Coverage

Additional living expenses coverage protects you against the hotel bills, gas bills, and other expenses you may incur if you are forced to live somewhere other than your rental property temporarily. 

For instance, if your apartment is flooded because of a major storm, and you must live out of the motel for a month, your additional living expenses coverage will help you pay for those costs.

Additional living expenses coverage can vary heavily in terms of length of time, total amount, deductible, etc. 

Still, this can be an excellent means to stay financially afloat while you wait for your rental property to be repaired after a major disaster.

Homebody offers this insurance package. Get a quote now.

Determining How Much Renters Insurance Costs

On average, renters insurance costs less than $20 per month. 

But renters insurance can vary heavily depending on your geographic location, state of residence, and other factors.

For most Americans, renters insurance costs around $17 monthly. 

This amount can be added to your rental bill or paid separately depending on whether your landlord mandates renters insurance or you have taken out a policy of your volition.

Renters insurance is primarily affected by:

  • Your state. Some states, such as Mississippi, have higher average renters insurance rates compared to more rural states, like South Dakota.
  • Your rental property’s area. City rentals usually result in higher renters insurance rates compared to rural property rentals since burglaries are more common in metropolitan centers.
  • Whether you filled out a claim for renters insurance in the recent past. Generally, insurance companies charge you higher rates for three years after filing a claim, but that surcharge will eventually go down if you don’t file a claim for a few years after
  • Your deductible amount. Your deductible is how much money you must pay before an insurance company reimburses you for any covered losses. The higher your deductible, the lower your monthly rate will be. The reverse is true if you choose a low deductible, as the insurance company takes on additional risk (by having to pay for your losses more quickly after an accident or incident).

Is a Renters Insurance Policy Necessary?

The real question for many tenants is whether they need renters insurance or if it’s just something extra they don’t need to worry too much about.

Truth be told, renters insurance policies are very rarely necessary (except in certain circumstances, details below). 

However, renters insurance is always a wise idea if you can afford it. You need it.

Just like life insurance is not strictly necessary, it’s always a financially good move if you can afford to take out a policy. 

If the worst comes to pass and you die before your time, a life insurance policy can protect your family from significant financial strain.

By the same token, a renters insurance policy will prevent your wallet from hurting too much if your apartment or home is broken into, if you experience a fire, or suffer some other unexpected property loss.

Choose Homebody. Choose Peace.

When is Renters Insurance Required?

In some cases, landlords or property owners may mandate renters insurance policies for each tenant. 

This is most common for apartment landlords that have a lot of different apartments to manage, particularly in areas with high crime rates or a lot of recent theft activity.

In these instances, new tenants must sign their rental agreements in full acknowledgement that they have to pay for renters insurance. 

On the plus side, landlords in these arrangements usually pick out the renters insurance policies, break down exactly what the tenants get for their money, and so on. 

The money for the landlord's insurance policy is taken out of the same overall monthly payment the tenants pay to their landlords.

Again, not every landlord requires renters insurance. 

But if your prospective landlord does, ask what the policy entails and what you are covered by. 

This should be included in your initial tenant paperwork, but it never hurts to be safe and double-check everything before signing any dotted lines!

Should You Get Renters Insurance if it Isn’t Mandatory?

Since renters insurance isn't strictly mandatory in most cases, you might wonder whether you should really get it. 

For many, even a basic renters insurance policy is still an excellent idea.

Since renters insurance is not very expensive when accounting for the average cost of rent and other fees, adding it to your monthly rental bill should be a small matter if you are financially stable. 

In exchange, you get much better financial security in the event of a theft, fire, water damage, etc.

When is It a Good Idea to Get Renters Insurance?

If you are still on the fence about taking out a renters insurance policy, there is some other things that can help you make a wise decision. 

Your Property is At Risk

For starters, renters insurance is an excellent financial protection tool if your property is at risk of one type of damage or another. 

As you have read above, personal property protection coverage usually applies to furniture, clothing, electronics, and so on. 

It protects you against the loss or theft of those items through burglary or fire damage.

No one wants to pay an unexpected $1,000 bill because someone broke into their apartment and stole their TV, stereo surround system, and other accessories. 

Once you file your claim and pay up to your deductible, you could get significant help paying for that loss so you can replace the stolen property ASAP.

And Homebody gives you peace when you get a quote.

You Might Have More Property Than You Think

Look at the property you own in your rental apartment or home. 

Odds are you have more valuable property than you may initially think. 

For example, if you have a widescreen TV and many other electronics in full view of the living room windows, your apartment could be at a greater-than-average risk of burglary while on Christmas vacation or Thanksgiving holiday.

This is doubly true if you have very high-value items in your apartment or home, like fine art or jewelry. Certain renters insurance providers enable you to take out additional coverage for high-value items. 

That way, if your jewelry is stolen, you can be reimbursed for up to a certain amount after paying an initial deductible.

If you believe your property is truly at risk, renters insurance is an excellent way to protect your wallet.

Your Property Might Be At Risk of Specific Threats

On top of that, your property could be at risk of specific geographic threats. 

As an example, if you live in an area that is prone to earthquakes, it may be a good idea to purchase personal injury coverage for earthquake damage specifically (remember, standard coverage usually only applies to theft or fire).

Similarly, if you live in a flood-prone area, getting property protection coverage against flood damage is smart if you can afford it.

You Want Peace of Mind

However, it’s a good idea to get renters insurance not just to protect your property but also for long-term peace of mind. 

If you live in an apartment or home with recent burglaries, you might feel slightly worried about a burglar coming into your apartment and stealing your property.

Even worse, you may worry about paying for any stolen or damaged property if money is already tight. 

If you can afford around $20 per month, you can give yourself much more peace of mind. 

For lots of Americans, it's easier to pay $20 monthly than it is to pay $500 upfront due to an unexpected loss or accident.

Don’t discount the peace of mind a good insurance policy can provide. 

That peace of mind will help you sleep at night and enjoy your life in your rental property. And that is why Homebody is always recommended.

You Need Financial Stability

Renters insurance gives you extra financial stability. 

Instead of having to face a massive financial burden that comes all at once, renters insurance is a minor financial burden you can afford if you take a look at your bank account and budget plan.

Ask yourself whether it's easier to pay $1,000 in an emergency or $20 monthly for renters insurance. 

You will want to choose to pay $20 monthly.

Thus, renters insurance can provide important financial stability by preventing you from making massive payments to cover fire damage or theft losses, and medical bills if someone is injured in your rental property.

You Can Afford It

Above all else, consider taking out renters insurance if you can afford to do so.

Remember, it’s pretty cheap, especially considering how much you must pay for monthly rent in most major metro areas. 

It’s somewhat similar to life insurance in that the potential payout you could receive is truly excellent when you think about how much you have to pay each month. 

The “risk” of “wasting” $20 per month is pretty low when considering the security and protection you’ll receive once you remove the right policy.

Determining How Much Renters Insurance Coverage You Need

Should you choose to take out a renters insurance policy, you’ll also have to decide how much coverage you want.

A lot of renters choose the minimum policies. Because of this, they have relatively high deductibles, and they don’t have a lot of coverage for high-value items or any coverage for rare or unlikely damage types. 

For the best results, it’s a good idea to:

  • Take stock of the valuable inventory in your rental home. That way, you can roughly estimate just how much coverage you need from your renters insurance provider if a thief enters your building and steals some or all of that property
  • Look at your budget and determine how much extra money you can spare each month. For example, if you can spare another $30 for renters insurance, it might be worthwhile to use that amount for an insurance policy that comes with lower deductibles and higher coverage maximums
  • Think about whether you are at risk of an unlikely or rare type of damage. For instance, if you aren't in a flood-prone area, you probably don't need to take out flood protection insurance

Enjoy Life, Worry Free and Insured

If you’ve gotten to this point, congratulations – you now have a comprehensive understanding of why you need renters insurance! That’s certainly something to gush about.

In the end, you can always use renters insurance if you want peace of mind and if you want to protect your property and your wallet from unexpected losses or damages. 

And Homebody is the next thing to think of.

The right renters insurance policy can make a living in a rental apartment or home much more secure, both financially and otherwise.

If your landlord doesn’t mandate renters insurance, consider your options carefully before deciding whether or not to take out a renters insurance policy.

The right policy could save you from some major financial headaches later down the road!

Choose Homebody. Choose Peace.

Trust Guard Security Scanned