If you’re renting your first apartment or home, it’s a good bet your landlord may require you to have a renters insurance policy. While that may seem like an unfair request or requirement for them to make, and one you may not have budgeted for, renters insurance is important. Let’s delve into what it is and why it’s important.
Renters insurance provides two types of coverage. First, it covers everything you move into your new apartment or home including your furniture, clothes, dishes, cookware, electronics, linens, etc. If you moved it in, either initially or after you’ve been there a few months, renters insurance covers it up to the amount of coverage you purchased against a loss. Coverage can be altered before the policy renews when you buy a new TV, sofa, or other items.
The second type of protection renters insurance provides is personal liability coverage. This is designed to cover anyone who comes into your apartment, invited or not, they get hurt and decide to sue you for negligence. The most common examples are a pet bites a maintenance worker or a guest falls and gets hurt. Without a renters policy, you would be personally liable and have to pay for their care out of pocket.
That brings us to why renters should have renters insurance, and there are two reasons I think it’s important. The first reason is the landlord’s property policy does not cover your personal property for damage caused by a fire, smoke, water leak, etc. that they did not cause. For instance, if your upstairs neighbor’s tub overflows and the water runs down into your unit, a renters policy will cover damage to your clothes, furniture, and other personal property. Google apartment fires for where you live, and you won’t have to look too far to see that they do happen.
Secondly, it makes good financial sense to pay a little money to an insurance company to shift, or transfer, the financial burden of a total loss to them rather than be responsible for it all by yourself. The likelihood of a total loss is relatively small, but they do happen and can be financially devastating if you’re not properly covered. This is one of the underlying principles of insurance and why it makes good financial sense to have it.
What do you think? Share your questions, thoughts, and experiences with me on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you!