What Is Renter's Insurance? Should You Get A Policy Or Skip It Entirely?

Jessica Williams
Published Aug 3, 2023

When it comes to getting insurance coverage, most people are quick to get their health, car, and life insurance policies in order, but one type of coverage that's frequently overlooked is renter's insurance.

Renter's insurance can help with many issues relating to personal property damage while living on a rental property.

Despite how potentially valuable renter's insurance is, not that many people take it seriously or even know it exists.

If you live in a rental unit or plan to in the future, here's what you need to know about rental insurance.

What Exactly Is Renter's Insurance?

Renter's insurance is a type of insurance available to people residing in rental properties that covers two areas: personal property and liability.

If you become the victim of a burglary or your personal items get damaged due to environmental factors, such as flooding, hail, or fire damage, a renter's insurance policy will cover the cost of replacing anything that was stolen or destroyed.

Renter's insurance also provides some protection in the event that you get sued. If someone gets injured on a property you're renting and the injury was not the result of a structural problem (the landlord's responsibility), you are potentially culpable. In the event you're sued, a renters insurance policy will either partially or completely cover your legal expenses.

Much of this is similar to homeowner/s insurance, which covers much of the damage people's property sustains due to theft or natural disaster.

What Are Some Good Reasons To Get Rental Insurance?

Despite what some people think, a landlord s property insurance doesn't cover damage to their tenant's personal property. This means that if any destructive event occurs that's not the result of the landlord's negligence, then renters are completely responsible for replacing their own property.

This makes renter's insurance a valuable investment and compared to many other kinds of insurance, renter's insurance is relatively inexpensive and easy to qualify for.

There are a long list of unforeseen events that can cause significant harm to your personal belongings. Pipes can burst, your neighbors might start a grease fire that spreads to your apartment, violent storms can happen, and you might accidentally leave something out that hurts a visitor.

While there are many things you can't control, renter's insurance allows you to cover thousands of dollars worth of items and hundreds of thousands of dollars worth of legal liabilities for a relatively low price, with some policies being as low as $20 a month.

What Are Some Reasons It Might Not Be A Good Investment?

Like all forms of insurance, while it may seem like a sound choice at face value, the realistic value of renter's insurance really comes down to the fine print.

There are highly specific things that most renter's insurance policies (at least basic ones) don't cover, such as earthquakes. In the event that something straight out of left field happens, that doesn't necessarily mean your stuff will be protected, which is ultimately the point of having renter's insurance in the first place.

This doesn't mean that renter's insurance doesn't cover most of what you would expect it to, because it does. It's just that there might be something disastrous that happens which isn't covered by insurance for one reason or another.

There's also the issue of liability. If you're considered to be negligent in a case where someone is injured on your property, renter's insurance won't cover your liabilities. If you're actually at fault, this can be considered reasonable.

However, renter's insurance policies might have stipulations that state you won't be reimbursed for legal expenses under a set number of conditions, even if you were proven to not be negligent.

Is Renter's Insurance An Appropriate Option For You?

Despite certain drawbacks, renter's insurance can be a pretty sound form of coverage overall. It can cover a long list of very costly items in the event they're damaged or stolen. It's also not super expensive in most cases, so it's not high risk and won't drain your bank account.

Of course, it might also fail to cover what you need it to in the event of an emergency situation, but that's really an issue relating to insurance in general, rather than just renter's insurance.

Renter's insurance can really help you out if you're in a tight spot and it doesn't hurt to try it, but also keep in mind that lots of people have been just fine without it.

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