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How Do I Know If I Need Renters Insurance?

How Do I Know If I Need Renters Insurance?

Whether you’re new to the renting world or have rented for years, you could still have questions surrounding the topic, especially regarding renters insurance.

Insurance is one of the wisest investments a person can make and plays a crucial role in an individual’s or family’s financial planning and stability. The financial security it provides ensures you can face various situations, most of which are unforeseeable, that inevitably come up in life. This applies to your health, car, business, and house, and renters insurance is no different.  

Insurance for renters is a figurative safety net that brings peace of mind to individuals or families renting their homes, apartments, or condos. Similar to owners considering homeowners insurance, renters should consider protecting themselves from any unknown (and unfortunate) accidents, disasters, and events.

So how do you know if you need renters insurance? How much insurance should a renter have? What about all of your other questions? Today, we’re answering all of the questions and tackling each of these big-ticket topics.

Keep scrolling to find out more.

What is Renters Insurance?

To start, let’s cover the basics. What is renters insurance? Renters insurance, often called tenant insurance, is an insurance policy that gives renters similar benefits to owners and homeowners insurance. A tenant’s insurance policy will typically cover a renter’s personal belongings and possessions, offers liability coverage, and includes additional living expenses (ALE) if the rented property becomes unsuitable.

What Does Renters Insurance Cover?

If you’re looking for insurance for renters, it’s important to know what coverage you’re getting. 

Here’s what you need to know:

  • Personal Property Damage — If your personal possessions are destroyed or damaged by a covered event, your insurance company will cover the cost of the damage up to the limits outlined in your policy.
  • Personal Liability — If one of your visitors is seriously injured at your rental, tenant’s insurance pays for any liability costs, such as their medical bills and any lost wages, up to the policy’s limits
  • Loss of Use — If the residence you are renting becomes unlivable due to a covered event, your insurance policy will cover the extra living costs or ALE you would otherwise have to pay.

Of course, we have to remind our readers that policies can vary from one to the next. It is essential to take the time to thoroughly understand your policy and know what is covered and what isn’t.

Which Events Will a Renters Insurance Policy Cover?

Answering this question in a black-and-white way can be tricky since it depends entirely on your specific policy. Again, not all policies are created equally. Even two different policies from the same insurance company can look different and offer different coverage areas.

However, for the sake of conversation, many policies will kick in when the following events occur:

  • Theft
  • Fire and smoke damage
  • Lightning, windstorms, and hail damage
  • Falling objects
  • The weight of snow, sleet, and ice
  • Explosions
  • Riots and vandalism
  • Damage from steam-heating, water-heating appliances, and systems
  • Damage by aircraft or vehicle (not your own) 
  • Leakage or overflow of water or steam
  • Freezing of plumbing
  • and more!

So, if you’re concerned about being affected by any of the events listed above and want coverage, you’ll know you will want to invest in renters insurance.

Make sure to note that most tenants’ insurance policies will not cover floods or earthquakes. If you want additional coverage for these events, you need to talk to your insurance provider to purchase supplemental policies.

What isn’t Renters Insurance?

Renters insurance is not insurance for the structure or building. It is not insurance for a rental house. The landlord’s homeowners insurance covers the dwelling itself. Insurance for a rental house (also known as a homeowners policy) must be purchased by the property owner. Investing in a tenant insurance policy is the only way to financially protect your personal items and yourself against disasters and other unfortunate circumstances.

To clarify further, even if your landlord has homeowners insurance, you should still consider investing in a renters insurance policy. Without it, your possessions are not protected, nor will you have liability or ALE coverage. Your landlord’s policy cannot do anything to protect these items. Their policy will not help cover additional living expenses or replace any of your belongings. 

A renters insurance policy will not cover a landlord’s property. Damage to the property itself, not the tenant’s belongings, does not fall under renters insurance; that’s where the landlord’s home policy kicks in. They will need homeowners insurance for a rental house, the same way it is wise to have homeowners insurance for the house they live in.

How Do I Know If I Need a Renters Insurance Policy?

Many landlords and property management companies require tenants to acquire renters insurance before leasing their property. They make having a tenants insurance policy mandatory to limit the risk that renters will sue them for liability costs or personal property damages.

In many other instances, though, the decision to invest in renters insurance is left up to the renter. But it’s important to understand the risk associated with a lack of insurance. It is a gamble for renters to choose not to invest in tenant insurance. 

Say the property you are leasing is broken into, and your possessions are taken, or a fire destroys your personal belongings, and you do not have renters insurance; guess what? You are left footing the bill and covering the costs to replace those items. Moreover, if the rental property becomes unsuitable to live in without insurance, you will have to pay for other living arrangements.

A tenant insurance policy will protect renters from these unfortunate but possible situations. So the answer to “How do I know if I need renters insurance?” often comes down to personal choice.

All renters should protect their belongings and finances by investing in a renters insurance policy. If you have personal possessions you want to be covered, want help covering additional living expenses, or want coverage in a liability lawsuit, you know you will want renters insurance.

I Don’t Have Many Valuable Possessions. Do I Still Need Insurance for Renters?

In most cases, an individual’s personal belongings are worth more than they think. The average value of what would fit into a typical two-bedroom apartment is nearly $30,000! When you calculate your possessions’ worth, you might be shocked. 

However, even if a renter has little or no personal property to their name, the loss of use and liability cover make renters insurance a worthwhile investment.

My Roommate Has Renters Insurance. Can I Use Theirs?

Generally speaking, no, you cannot use your roommates’ insurance. Moreover, your renter’s insurance policy typically will only cover your roommates’ things if you all are related or their names are listed on your policy. Unrelated roommates should have their own renters insurance.

Domestic partners’ rules and regulations can vary from state to state, insurance provider to provider, and policy to policy. It’s best to take the time to learn about the laws surrounding renters insurance and your domestic partner where you live.

Some insurance providers allow unmarried couples or domestic partners to live with one another to buy a joint policy but they are not usually automatically insured. To ensure coverage, chat with your insurance company to have your questions answered.

If I’m a Student, Will My Parents’ Insurance Cover Me?

If you are attending college, live in a dorm, and are still considered part of your parents’ household, their homeowners or renters insurance should provide coverage for you. However, if you live off-campus, you’ll likely need your own policy.

To ensure coverage, always talk with your insurance provider to clarify any confusion or answer all inquiries.

How Much Renters Insurance Do I Need?

To determine how much tenants insurance you’ll need, take note of everything you own. Look at your clothing, furniture, electronics, kitchen gadgets, bikes, and other recreational gear. Then estimate how much money it would take to replace all of it. Once you have that number, you can round up to the nearest $10,000. That number is the minimum amount renters should have for personal property coverage. Having at least enough to cover your net worth is recommended for the liability amount.

Other FAQs About Renters Insurance

Q: Are Items I’ve Rented or Borrowed Covered by Renters Insurance?

A: Items in your possession, whether you’ve borrowed them, rented them, or bought them, are often covered under standard renters insurance policies.

Q: Will Renters Insurance Cover My Car?

A: No, your renter’s insurance will not cover your care. However, if you have personal belongings that are stolen from your car, those items could be covered. If you want to protect your vehicle, you will need a separate car insurance policy for that.

Q: What About My Bike?

A: Most renter’s insurance policies cover your bicycle and other sports and recreational equipment. With many providers, you can buy other add-on policies for more expensive equipment.

Q: Are There Policy Limits with Renters Insurance?

A: Most policies limit high-value items or specific categories of property (as mentioned above with certain sports equipment). For example, a policy with $40,000 in property coverage may only cover up to $3,000 worth of jewelry. If your collection is worth more than what is covered, you can add on an endorsement to increase the limits for items such as:

  • Jewelry
  • Cameras
  • Electronics
  • Firearms
  • Artwork
  • At-home business property

Q: What If My Belongings Were Stolen Away from Home?

A: Most renters insurance policies have something called “off-premises” coverage. This means that any items outside your rented property are also covered against the same cover events. For example, a bike stolen at the local coffee shop or, as we mentioned above, items taken from your car are usually covered.

Q: Is Renters Insurance Affordable?

A: Yes! In most cases, renters insurance is very affordable! The average tenant insurance cost is much less than a standard homeowners insurance policy. Of course, prices will vary from policy to policy and provider to provider. 

Q: I’ve Decided I Need Renters Insurance. Where Should I Get My Policy?

A: That’s easy. Bear River Mutual Insurance!

Get Renters Insurance Through Bear River Mutual Insurance Today!

Are you looking to purchase renters insurance or another type of insurance, such as car, business, or homeowners, the professionals at Bear River Mutual can help!

We know that life is full of unexpected situations and events, and even though we cannot predict when these unfortunate circumstances will occur, there are things we can do to prepare for them. 

The right insurance policy can protect you and your loved ones when these unforeseen situations arise. When you work with Bear River Mutual Insurance, our team will ensure you are taken care of and give you the peace of mind you deserve.

We offer reasonable rates and are dedicated to finding the right balance of value and protection for each of our clients. Our ultimate goal is to find you and your family the best coverage and rates possible. We are here to help you find the best solution to protect you, your loved ones, and your assets when the unexpected happens. 

Strong values have always been our business’ roadmap, and putting you and your family first ensures the highest-quality and personalized service out there. If you already have a policy, our knowledgeable team can provide you with a free, comparative review to determine how much money you can save when you make the switch.

As a local company in Northern Utah, we are aware of the unique needs of renters and businesses, home, and car owners across the Wasatch Front. If you live or have a business in Salt Lake City, Orem, Provo, and the surrounding cities in Utah, contact the trusted team at Bear River Mutual Insurance today!

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