Learn more about renters insurance and if it’s worth your money
Oftentimes, landlords require some type of renters insurance policy for their tenants. While you may feel like required policies are a scam, it’s actually a good idea to consider investing in renters insurance even if it’s not required by your landlord.
A renters insurance policy effectively protects your personal property from damage or loss, and protects you from a devastating financial situation in case of disaster.
Continue reading to learn more about renters insurance and why it’s worth your money in the long term.
What is a renters insurance policy?
Renters insurance is designed to help protect your belongings in case they’re stolen, damaged, or vandalized while you’re renting a property.
It protects you from unpredictable events, such as fires, electrical surges, and explosions.
What does it cover?
Typically, a renters insurance policy includes three types of coverage — personal property, liability, and additional living expenses.
- Personal property: If your personal property is destroyed in an event outlined in your renters insurance policy, your insurer will cover the cost, although you will have to pay a portion of the cost — this is your deductible. For example, if your deductible is $1,000, and $4,000 worth of property was either damaged or lost, your insurance will cover $3,000.
- Liability: Your renters insurance policy will typically cover repairs if you damage someone else’s property. Additionally, if there was an accident on your rental property, your insurer will help cover your guest’s medical bills and loss of wages, if you’re found responsible.
- Additional living expenses: If your rental property is left uninhabitable by a covered event, your renters insurance policy will help to pay for your living expenses, such as hotel bills, while your property is uninhabitable.
How much do I need?
It’s typically recommended that you have at least $100,000 in liability coverage. When deciding how much renters insurance is enough for your personal property, think of everything you own in your rental property, and how much it would cost to replace it.
By getting a renters insurance policy that covers the cost of everything you own, you’re protected in a worst case scenario event where everything is damaged or destroyed.
It’s also important to note that sometimes a renters insurance policy has sub-limits or category limits for items of high-value, such as jewelry. For example, a policy may have a jewelry sub-limit of $3000, meaning that your policy will only cover up to $3000 in jewelry if it is damaged or stolen.
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