Whether your landlord requires it or not, it’s worthwhile to have renters insurance. Read on to find out how much coverage you’ll need.
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As a tenant, you want your rented space to feel like home. Maybe that means a thousand succulents or a lava lamp and a Pink Floyd poster. While we can agree to disagree about the merits of hanging a tie-dye wall tapestry, we’re surely all on the same page that a home should be a haven. Which means we can also agree that the absolute last thing you want to deal with are bad things happening to your rental property.
That’s where renters insurance (also known as tenant insurance) comes into play. Renters insurance protects you from financial loss if your personal belongings are damaged, someone is injured in your home (or has their property damaged), or you need to live elsewhere temporarily while your residence undergoes repairs.
Which leads us to an all-important question:
Technically, no law requires you to have renters insurance. That being said, many landlords and property managers mandate coverage for their tenants. Although states can limit exactly how much renters insurance a landlord can require, most states do permit landlords to impose the requirement.
There are several reasons a landlord might require renters insurance. Having a policy means:
As a rule of thumb, a landlord will likely require you to have enough personal property coverage to cover the cost of replacing your belongings. While it may seem like nothing more than a pile of Ikea furniture and old socks, you may be surprised to realize you probably own at least $20,000 to $30,000 worth of stuff.
A landlord may also require sufficient personal liability insurance to protect you (and them) from a guest’s injury or damage to the property. A standard renters insurance policy generally comes with $100,000 in coverage, which should offer substantial enough protection for most renters.
They can ask you for proof of your insurance and may want you to list them as an additional insured party on your policy. Make sure you check all insurance requirements before you sign your lease. Be sure to read through your lease to see what exactly is needed from you.
Like everyone, landlords want to protect themselves from potential financial loss, so their renters insurance calculations depend on the risk involved. If you own a dog, for example, the landlord may want to see higher personal liability coverage since the average dog bite claim comes to around $49,000 (including legal costs and medical payments).
At the end of the day though, how much insurance you get is entirely up to you. This is because your landlord is in no way responsible for what happens to your stuff. To figure out how much insurance to get, do a quick inventory of your belongings and figure out how much you own, financially speaking. Don’t forget to take pictures, which can prove useful if you ever have to make a claim.
To buy or not to buy, that is the question. Purchasing additional insurance really depends on your circumstances and budget. If you happen to own a lot of fancy electronics, masterpieces by Monet, or other collectibles, obtaining extra protection for those items is a smart idea. That’s because a basic renters insurance policy may have limited coverage for big ticket items. So if your Rolex watch was stolen, you might not receive a payout that covers the full loss. Additional insurance or a rider can help bridge that gap.
Likewise, while $100,000 in liability insurance coverage may sound like a lot, it won’t cover everything. Given the state of healthcare in the United States, it’s possible that certain medical bills will exceed your policy’s limit. All insurance comes with restrictions, so if buying additional policies brings you peace of mind, by all means, go for it. As for the cost of renters insurance itself, don’t worry too much as the average premium is relatively inexpensive.
The only things true about life are death and taxes. Beyond that, everything is up in the air! Fortunately, you can prepare for the inevitable by purchasing insurance. The Marble Marketplace makes shopping for renters insurance easy. You can compare renters insurance quotes from multiple insurance companies, and then you can manage all of your policies via a single dashboard — all while earning rewards. Get started today!
