Renting might not come with as many responsibilities as owning a place, but too many people go wrong assuming that they c
an skip insurance simply because they’re leasing. It’s still baffling that while some 95 percent of homeowners carry homeowners insurance, about 59 percent of renters don’t. They do so without acknowledging the major risks they’re exposing themselves to. Let’s go through the main risks of renting.
- Damaged possessions
Instead of asking yourself if you need insurance as a renter, put it like this: can you afford not to have it? Is the $25 a month that expensive? What if you consider the alternative? Imagine having to replace all your clothes, furniture, electronics, food, personal items and personal memorabilia from your own pocket. With renter’s insurance, the agency will cover most or part of the value of your damaged goods, all you will have to do is to take steps to document all your possessions so you can prove ownership in a renter’s insurance claim.
- Loss of a habitable home
In the unfortunate event that a fire, flooding or electrical issues affects your home, the amount of repairs required can get extensive, but can also turn your rental uninhabitable. While the landlord will handle the repairs, you will need a place to live. Here’s where renter’s insurance steps in and covers the costs of your stay at a hotel until you can move back to your home.
- Theft and burglary
If your home is broken into or burglarized and have a renter’s insurance policy, you can file a claim with your insurance provider to replace any stolen or damaged items. The policy also covers belonging that are not physically in your home. If you fall victim to thieves/burglars notify the authorities first as filling a renter’s insurance loss claim will require a police report of the theft.
- Personal liability
This is probably the crown jewel of the renter’s insurance policy. If a dog bites someone or if the pizza guy slips and falls on your property, you won’t be held personally responsible for those damages, instead your renter’s insurance provider will step in and cover the costs. The carrier might even hire an attorney to defend any lawsuit. The coverage extends to damage to adjacent properties, too. As an example, if your toilet or tub overflows and leaks into the neighbor’s unit below and causes damage to their personal property, renter’s insurance will cover the cost of repairs.
- Eviction for violating the lease agreement
Lease agreements these day can include a clause that states the renter agrees to purchase a renter’s insurance policy. It usually clarifies that the landlord’s property insurance coverage doesn’t extend to your personal belongings. Thus, signing a lease agreement with such a clause, means that you are agreeing to maintain the insurance coverage throughout your residency there. However, if you fail to purchase a policy or allow it to expire, your landlord has every right to serve you with a “comply or quit” notice and from there to beginning the eviction proceedings is just a small step.
If you don’t currently own a policy, reconsider. The financial security it brings is worth more than those $20 a month, not to mention the peace of mind. Think smart and secure your peace of mind along with your bank account.
