Renters Insurance (Why it's important!)

Most people understand the concept of renters insurance. It covers your Personal Property (Clothes, Furniture, Electronics, etc.) at the residence you are renting. Whether you are renting an apartment or a home, there are a few key details you need to understand so you know you are properly protected.

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First, in almost all cases a landlord is going to require that you have renters insurance in your lease. And once you sign this lease it becomes a legally binding agreement. This means, however unlikely, that you could potentially be evicted if you do not have a renters policy in place because you are not sticking to the agreement you signed. But why is this? Because when a landlord gets an insurance policy for the rental home/apartment, one of the application questions that determines their rates is if they require all of their tenants to have a renters policy. Depending on the carrier, they may be required to show proof of this to get a better rate for their policy. So if you do not carry renters insurance, they cannot give proof and then their rates increase also. But the landlords policy, whether you live in an apartment or a home, does NOT cover your personal belongings. The landlords insurance policy covers the structure itself and a small amount for THEIR personal property (Appliances, etc.). So if something happens the home/apartment would be rebuilt, but if you did not have a renters policy you would be out thousands of dollars to replace all your items inside the home.

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Second, renters insurance policies have other coverages besides personal property built in. One of those is the Liability protection. This amount is typically set at $100,000 or $300,000 and provides coverage to you in the event of a lawsuit or wrongdoing on your part. The most common thing we see is a fire or water damage at an apartment complex due to negligence that results in multiple units being damaged. When this happens, the Liability coverage of your policy would kick in to not only replace your belongings, but also those of the other units that were affected in addition to paying out if they had to rent somewhere else why their apartment was being repaired and for the damages to the building itself. If you don't have a renters policy in place with Liability protection, you could be taken to court with multiple lawsuits and have a judgement placed against you for not being able to pay the reparation's to everyone injured.

*I also need to note that if you have $100,000 in Liability protection, that runs out quickly. Think about the amount of property you have inside your home. On average, it's typically between $15,000 - $30,000 per apartment worth of belongings. So if you are at fault and cause damage to 2 or 3 other units, that is already $45,000 - $90,000 in just personal property liability before the cost of the damages that need to be repaired and the amount that the other 2 or 3 families will have to spend renting somewhere else until the can get back into their apartment. So do not take the Liability portion of any insurance policy lightly, because one bad day can lead to financial devastation very quickly!

Lastly, renters insurance also provides Loss of Use coverage. This provides monetary compensation to you, the insured, whenever you need to rent somewhere else due to your residence not being livable. In the example above about liability, if the other party is at fault you can file it against their insurance. But with a large claim such as this it may take time for them to investigate and get all the details to begin paying out from their policy, if they even have one. So you may be forced to either pay out of pocket to be able to have a roof over your head immediately or file a claim on your policy and let your carrier subrogate (Go after the other insurance company once the claim is settled). Worst case scenario, the person who caused the damages does not have any insurance. What then? You will need to file a claim to get your property replaced and a place to live until your home is livable again. And in that case you have legal options as well, which I will not get into because I am not a lawyer and would never want to give false or misleading info.

As a parting note, it is also important to note that in many instances the cost of the renters insurance is completely covered by getting a bundle discount with your auto policy. For example, just having your auto policy might be $130/month. With a renters insurance bundle your auto policy decreases to $115-$120/month with the discount added. And if your renters policy is between $10-$20/month, then you are either saving a few dollars a month AND getting your Personal Property and Liability protected, or you may only be paying an additional $3-$5/month to have all that additional coverage which is a no brainer. At the very least, you need to get all your options and see how having a renters policy will affect your auto insurance. You have to have both anyways in 90% of the cases we deal with!

While this is only a brief snapshot of a renters policy, I hope it opens your eyes to the importance of having a policy of your own. Typically a renters insurance policy runs between $12-$20 per month. Less than a dollar a day, or about 3 less coffee's a month ensures your belongings are covered, you are protected if someone files a lawsuit against you, and you can still have a roof over your head in the event something happens to the place you are renting. Every carrier will have their own nuances in the policy wording, so if you don't have a current policy give us a call to get a free quote today. And if you do already have a policy, ask your agent for the policy jacket or full policy terms and definitions so you can ensure you have the right coverage in place for your specific needs!

Now that you know some of the reasons why you should have renters insurance, call us today at 678-719-0678 or click below to get a free quote. It only takes a few quick minutes to get the protection and peace of mind you deserve!

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