Should Tenants Have Insurance? Is there anything else except that?

When just 37% of renters actually have it, renters insurance may not seem like something every renter needs. For as little as $12 to $15 per month, you can insure everything you own against theft and damage, and the coverage extends much beyond what you might expect.

Before you get renters insurance, here’s what you should know about it.

What Is Covered by Renters Insurance?

The cost to replace your home’s contents, including furniture, electronics, computers, clothing, jewelry, and appliances, can be covered by a renters insurance policy.

You can get your money back (up to your policy’s limits) if any of the following 16 things happen to your belongings and you have renters insurance:

• Lightning and flames
• Hail and high winds
• Explosions
• Riots
• Aerial collisions cause damage
• Accidental car damage (not your own)
• Deterioration caused by smoke
• Vandalism
• Theft
• Explosion of a volcano
• Prompted by objects in free fall
• Snow, ice, and sleet have a heavy weight.
• Water/steam heating appliance/system damage
• Seepage or steam overflow
• Infrastructures for heating, cooling, and plumbing freeze over

If your laptop is stolen while you’re on vacation, for example, you may be able to collect on your renters insurance policy even though it wasn’t in your home at the time of the crime.

Medical expenditures and personal liability coverage

If someone were to get hurt in your apartment, the renters insurance coverage would pay for medical bills and any other costs you could incur as a result of the injury. Personal liability and medical coverage in your policy will pay for your guest’s medical bills if they are hurt on your property due to things like slip and falls or attacks by your dog or cat.

Their liability insurance will pay for some of their legal fees if they decide to sue you for their injuries.

Property damage to others for which you are legally responsible may be covered by renters insurance. If a pipe bursts in your apartment and floods the one below it, your insurance should pay for their repairs.

Loss-of-use insurance

If your rental property is destroyed, your renters insurance might pay for a hotel while you find a new place to live. If it’s more than you’d usually spend on food, it can be used to cover travel expenses like lodging and meals. As an illustration, if a fire destroys your apartment and must be rebuilt, your loss-of-use insurance will cover the cost of a hotel room while you wait for your home to be repaired. As most hotel rooms do not have kitchens, you may be able to get reimbursed by your renters insurance for the higher frequency with which you will be dining out. If you have to drive further to go to work, your loss-of-use insurance will cover the cost of gas.

Renters insurance sometimes includes coverage for “supplementary living costs,” which can help cover your expenses until you can get back into your apartment.

Renters insurance also protects you against losses you may not have anticipated, such as:

• Credit card/bank forgery coverage: If a thief breaks into your home, steals your credit card or checkbook, and goes on a fraudulent spending spree, your insurance company may reimburse you for your losses.

• Other people’s property: Not everything is covered by renter’s insurance. To illustrate, let’s say you borrowed some exercise equipment from a friend or were given their tablet, LP recordings, or books. If a fire or a leaking faucet destroyed all of these items, your insurance would pay to replace both sets.

• Items kept elsewhere: Renters insurance extends beyond the four walls of your rental property. Damaged items in storage outside of your rental home may be covered by some plans. It could protect your vehicle’s contents against theft or other damage that may occur while they are in storage.

• Food: In the event of a power outage, the contents of your refrigerator may be covered by your homeowner’s insurance policy, so you need not worry about losing your perishables. (In a perfect world, we’d call it “short-circuit damage.”)

What Does Renters Insurance Exclude?

Renters insurance plans vary widely in what they do and don’t cover, so it’s important to conduct your research before settling on a policy.

Renters insurance in some regions may not cover damage caused by some common natural disasters unless a supplemental coverage is also purchased. California renters insurance does not cover earthquakes, and neither does Florida renters insurance cover floods.

Lacking proof of ownership, an insurer has no way of knowing whether or not to replace stolen or damaged items. If you don’t routinely keep paper or digital receipts for everything you buy, this could be difficult. In the case of a lost, damaged, or stolen property, a receipt is not required so long as you can prove ownership. You should keep photographs, receipts, credit card records, or detailed descriptions of even little items in case your insurance company requests them.

Your roommate’s things are not covered by your renters insurance unless the two of you are married or otherwise related.

Renters insurance typically does not pay for exterminators or repairs caused by pest infestations, leaving the burden of those costs on the tenant or landlord.

Pets are not covered by renters insurance for damage to personal property, but damage to other people’s property is. If your dog destroys your neighbor’s chair, for instance, you won’t have to pay to fix it. If your pet causes injury to another animal or person, whether inside or outside the home, the insurance will cover the cost of veterinary care or hospitalization. It’s important to verify your coverage to determine if your pet is covered, as some breeds are specifically excluded.

Package theft and renters insurance can be a murky subject. If you can prove that your mail box was stolen, you may be able to collect on your renters insurance policy’s coverage for personal property loss. Depending on the parameters of your policy, you may be able to do this by producing proof of purchase, proof of delivery, or even a statement from the company saying that it was delivered.

Claiming the stolen package on your insurance may not be worthwhile if its value is less than your deductible, as you will be out of pocket even if the claim is successful. You may be eligible for a partial refund if the total cost of the package is more than the amount your renters insurance will cover, or you may be able to add a rider to your policy that will specifically protect the item.

Is Renters Insurance Beneficial?

You can typically choose between a few different solutions. Having one is a good idea if you live in a place with a high crime rate. If you have a lot of expensive belongings in your apartment, or if you just want some piece of mind, then getting renters insurance is a good idea. It could be fairly cheap and quite useful when needed, depending on the strategy.

Landlords may stipulate that tenants have renters insurance before signing a lease because such coverage can be beneficial for both parties. This lessens the possibility that your landlord may have to foot the bill for repairs, veterinary care for your pet, relocation costs in the event of a natural disaster, or even stolen property.

What Kind of Renters Insurance Do I Need?

You need to decide how much protection you need for your 1) possessions, 2) loss of use, 3) liability, and 4) medical costs while shopping for renters insurance.

Before deciding on an amount of coverage for personal property, think about everything you own and how much it would cost to replace the things you’ll need in the event of an emergency. If your laptop is damaged, for instance, you should probably fix that before worrying about replacing your kitchen appliances. By taking this approach, you may be able to save an amount that is both manageable and beneficial.

If your flat is uninhabitable for a long period of time, you will need to set aside funds to cover loss-of-use or temporary living expenses, and you should do so using a spending plan that accounts for a lengthy period of time. You can use this figure to calculate how much money you’ll need to maintain your current standard of living until your apartment is inhabitable again.

It might be challenging to determine how much coverage you need for things like personal liability and medical expenses. Considerations beyond these include things like where you live and whether or not you have a pet. It’s possible that your landlord or the building’s HOA will need you to carry a specific amount of personal liability insurance before they’ll let you move in. In light of this, you may want to think about how much money you want to set away in case of injury, legal action, or property damage. Think about how much money you’ll need for things like medical care and legal representation, and set aside that much money so you won’t have to worry about paying for them out of pocket.

Often, we fool ourselves into thinking that our possessions are safe from harm and will never be taken. If the worst that may happen is that we waste some money on protection, then why bother? Insuring your things against loss or damage with renters insurance may be the least difficult decision you have to make.

Whether you think renters insurance is right for you or if your landlord or building requires it, a good place to start is with a low-cost option like Lemonade. Lemonade can help you get the insurance coverage you need at a low monthly rate, with competitive coverage, and through a simple mobile app. If you already have insurance but are unhappy with your coverage, you may be able to switch providers with the help of Lemonade.