We’ve all heard about car insurance and homeowners insurance to protect our automobile and home, but did you know that if you are leasing or renting a space to live you may want to consider another kind of insurance called renter’s insurance?
Renter’s insurance is relatively inexpensive and can provide financial security in the case of a catastrophe. Let’s take a closer look at what this insurance is, what it covers, and how many Americans utilize this as they rent or lease living space.
What is Renter’s Insurance?
According to leading national insurer Nationwide Insurance, renter’s insurance “protects your personal property in a rented apartment, condominium, or home from unexpected circumstances such as theft, a fire or sewer backup damage – and will pay you for lost or damaged possessions. It can also help protect you from liability if someone is injured on the property.”
Many renters mistakenly believe that a landlord’s insurance, which covers the structure of a building, will also cover their belongings and medical bills in the case of an accident such as a fire or flood. This is not true, but the renter’s insurance could make up the difference and allow the renter to replace or repair their possessions as well as cover liability in the case of injuries sustained on the property.
How Does Renter’s Insurance Work?
Now that you know a little more about what this type of insurance is, let’s focus on what it covers and how it works.
Most renter’s insurance covers four main areas: loss of property, loss of use, liability, and medical expenses. In the case of a disaster causing the destruction or loss of your personal belongings, the insurance would cover the replacement of your clothing, furniture, electronics, and other belongings that were inside the property during the incident. This could be a huge financial strain if you have to buy out-of-pocket to replace all that you own including expensive technology.
In the case that your apartment or rental unit was uninhabitable, the renter’s insurance would cover the payment of hotel stays, restaurant meals, or other expenses if you have to live elsewhere while your home undergoes repairs.
As for liability, the renter’s insurance can pay out if it is determined that you are responsible for injuries to other people or damage to their property. It can also cover injuries to other people or yourself in your home, regardless of fault.
How Many Americans Utilize Renter’s Insurance?
According to Simply Insurance online, only “only 57% of renters in the United States had renters insurance, compared to 42% in 2018.” This relatively low number is shocking to most insurance providers since the cost of this type of insurance is relatively low, averaging just under $200 a year in 2020.
Given the relatively low cost of this insurance and the fact that over 40% of renters are not taking advantage of this option, we suggest that you talk to your insurance provider and add this little bit of peace of mind to your current automobile or other insurance.