According to recent surveys, 66% of people aged 18-29 rent their homes, but only about 30% of them have renters insurance. Many don’t understand what it is, how it works, or why they could need it. Renters insurance covers losses from incidents that many people just assume won’t happen to them in their rental property (ie, flooding, fire, robbery, etc.). It is important to note, though, that not all renters insurance or home insurance covers flooding. In many areas it is necessary to purchase separate flood insurance from your current policy. Ask your agent what coverage is best for you.
Renters insurance covers your personal property such as clothing, furniture, dishes, electronics and other contents of your home. To get the rough estimate of coverage you want to have, add up the cost of replacing all of your major personal property and then double the amount that you came up with (ex: if you have $10,000 of major property that could be replaced you would want to have at least $20,000 worth of coverage on your rental).
Renters insurance also has liability coverage. This is important because it protects you from financial loss if there happens to be a lawsuit revolving around your rental property. Meaning, if someone gets hurt in your home and tries to sue you, liability coverage may cover those expenses.
Lastly, renters insurance also covers additional living expenses. If you are ever unable to stay in your current rental after a loss that is covered, the additional living expense portion of the insurance will provide you a reimbursement for reasonable cost of housing up to the policy limit. Basically, this means that if something happens to your rental, such as a fire, and it is uninhabitable the insurance company will provide you with money to stay in another rental for a while.
All in all, make sure that you’re doing your research into what type of coverage is best for you when you’re renting. It’s important to contact an insurance agent with any questions that you have before signing up for something.
Questions about renters insurance? Here are the simple facts about it:
Personal Property Coverage: add up the expense of replacing all your major personal property and then double that amount- that’s how much you want covered!
Liability Coverage: if someone gets hurt in your home and tries to sue you, this covers the financial burden.
Additional Living Expenses Coverage: in the event of a tragedy where you can’t stay in your rental anymore, this helps to cover a rental for you to stay in for a short while.
Renters insurance is pretty important when you move into a new place! Unfortunately, tragedies and bad circumstances can happen to anyone and it never hurts to be prepared. Ask your agent today what type of coverage will work best for you!