Why Do I Need Renters Insurance?

For many their first home is a rental unit or an apartment. I also did this for a few years. When you go to sign the leasing agreement the leasing office will require proof that you have renters insurance. This is the main reason you purchase renters insurance.

The second reason to purchase reason is to protect you, the renter. There are a few coverages that are important for a renter of a unit or an apartment to have.

  • Contents or Personal Property – This is all the stuff you put into the unit/apartment; furniture, clothing, pots/pans/dishes, electronics, etc. If you lose everything in a fire will you have the money to replace all of your personal belongings?
  • Loss of Use – If you have a covered claim and you are unable to live in your unit/apartment. This coverage will cover the cost of a hotel, apartment, etc. temporarily. You will still be responsible for the rent on your unit/apartment unless the leasing company decides to let you break lease.
  • Personal Liability – If someone slips in your unit/apartment and decides to sue you for medical costs and/or inability to work, etc. this is coverage to pay for the damages or to settle the suit. If found liable for a traumatic event your wages can be garnished by the courts if necessary.
  • Medical Payments – If the same person that slips in your unit/apartment needs medical attention this is good will dollars to get them necessary emergency care.

In addition to these standard coverages you should consider the following additional coverages.

  • Replacement Cost Coverage for Contents/Personal Property – After a covered claim you will want new furniture, clothing, etc. not used.
  • Personal Injury – If you are accused of libel, slander, defamation of character whether true or not you will want coverage which can be provided through this endorsement.
  • Identity Fraud – Now that you are taking on more responsibilities you have a higher exposure to an identity fraud event, which can have long term consequences if you are unable to undo the damage.
  • Water Back-Up – If a drainage system in your unit/apartment backs up into your home you will need coverage for the repairs and personal property damaged. You must add this endorsement to yours renters policy in order to have coverage for this type of loss. This is the #1 cause of home claims across the country.

Many renters assume the leasing company or property manager will cover the cost of a loss to your unit/apartment. The leasing office/property manage can still hold you responsible for the damages and they will not cover you for the loss of your personal belongings or your liability as the occupant of the unit/apartment.

Overall the cost of renters insurance is minimal at around $200 a year or $15 monthly. While renters insurance may feel unnecessary it is important in order to maintain your financial independence.

Home Inventory

Do you know how much stuff you have in your home?

Would you remember every item you currently own after a major loss?

What about the value of each of those items?

These are some pretty tricky questions, which are even tougher to answer after you experience a home fire or other catastrophe.

In an effort to help you recover after a loss you should have a home inventory or listing of all of your personal property in your home. So when a loss does happen you can relieve some of your stress and get back to normal quicker.

Insurance Information Institute (III) has come up with software that can be used via your iPhone or Android to document your personal property, and it’s free!

This software should even be used by individuals that own a condo or rent. The value of your personal property is the driving force of policy premium. Having an idea how much stuff you have will help narrow down a premium faster.

Information on conducting a home inventory, and instructions on getting the software can be found by visiting, http://www.knowyourstuff.org/iii/login.html.

Check it out today!