Why Every Renter Needs Renters Insurance

by Hank Coleman

Why you need renter's insuranceEvery renter should have and needs renters insurance. Renters insurance, which is also often known as personal property insurance, is essential for every renter no matter what your circumstance. Many renters forgo this coverage, and as a result, are putting themselves in financial jeopardy should something happen.

Why You Should Purchase Renters Insurance

Individuals should consider getting renters insurance to protect their property should something happen. A common misconception among renters is that the landlord will cover damage to their personal property if there was a disaster, like a fire or flood. However, landlords do not cover the personal property of renters.

So, if there was a fire in your neighbor’s unit, and it spread to your unit, or the firefighters flood your unit with their fire hoses, you would be out of luck when it came to replacing your stuff. The only thing that your landlord’s insurance would cover is the actual physical building structure. That is why getting renters insurance is so important.

What Renters Insurance Covers


Every Renter Needs Renters Insurance
Renters insurance is great because it covers a whole slew of things. First and foremost, it covers your personal property. It covers your personal property not just from damage but also from theft. It also protects your property anywhere. For example, if you had your laptop stolen from your college library while you were there, it would cover that as well.

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Renters insurance policies can cover both the replacement cost or actual cash value, so choose one that best fits your needs. If your home is damaged and you cannot live there, renters insurance will also cover the cost of accommodations elsewhere. You simply need to ensure that your renters insurance policy includes that stipulation which most do.

If someone was injured in your unit and tries to sue you, renters insurance usually provides some type of personal liability coverage also. Again, many renters falsely believe that they would be covered by their landlord’s policy. This simply is not the case. The only time a landlord’s policy will cover against lawsuit is when an accident happens in a public place on the property such as at the apartment complex’s pool.

Understanding The Cost Of Renters Insurance

The other great thing about renters insurance is the relatively low price. Depending on your coverage amount, your monthly premium could be as low as $4. Also, many renter insurance plans do not have a deductible, meaning that if you did need to file a claim, there are no out of pocket costs to pay prior to getting your items replaced.

It is always a smart idea to shop around before making any permanent decisions about your renters insurance. Some  organizations, like AARP, offer excellent renters insurance that can provide numerous benefits. They can protect your  belongings by providing cash reimbursements that accurately represent the monetary value of each item lost. There are a  number of optional endorsements available as well, such as assisted living care coverage, green rebuilding, equipment protection advantage, and several more. Keep in mind that these benefits differ depending on the state you live in. Thankfully, you can go online and see what benefits you’re eligible for in a matter of minutes.

Renters insurance is far too cheap and covers too many of your personal possessions not to protect yourself. Do not be caught off guard without having insurance to protect your personal property from lost, damage, or theft. And, do not make the mistake of going unprotected from lawsuits. Every renter should have and needs renters insurance.

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About Hank Coleman

Hank Coleman is the founder of Money Q&A, an Iraq combat veteran, a Dr. Pepper addict, and a self-proclaimed investing junkie. He has written extensively for many nationally known financial websites and publications. Hank holds a Master’s Degree in Finance and a graduate certificate in personal financial planning. Email him directly at Hank[at]MoneyQandA.com.


Hank Coleman has written 590 articles on Money Q&A. Learn more about Money Q&A on Twitter @MoneyQandA and @HankColeman.


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{ 17 comments… read them below or add one }

Money Beagle

When I had just graduated college and rented my first place, I made a costly insurance mistake. It wasn’t the renters insurance mistake, though. I did have that (luckily never needed it). But the mistake was that I didn’t get rental insurance on my auto policy. When I got into an accident (not my fault, someone ran a stop sign) and my car took four weeks to replace, I was on the hook for the rental car. Oops. In other words, look at all of your insurance needs otherwise you’ll likely get burned!

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bogofodebt

Thanks for the reminder! I’ve been meaning to look into this–right now we don’t have it but we both want it. I’ll have to call later today!

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krantcents

Renter’s insurance is cheap and should be a no brainer. It is typically around a $100 per year. Most claims are for things you cannot control such as fire, theft or loss outside apartment.

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Tackling Our Debt

I agree, it is cheap and it is a no brainer. But when a young person first moves out into their first rental property I wonder if they know that they need this. Do their parents remember to tell them?

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L Bee and the Money Tree

Well said–renters insurance is REQUIRED at most places in NYC, and why not? It’s the cost of a subway sandwich and gives you incredible peace of mind-especially in a city where anything could happen.

Because so many youths grow up in small towns few are educated about renters insurance. Thanks for helping spread the word!

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BeatingTheIndex

It makes sense only if the cost is extremely low like $100 per year. Regardless of the price, I wonder how many renters know this service exists.

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Hank Coleman

That’s not true at all. It makes sense almost all the time. Your expected value of loss and break even point for the insurance (like all insurance) is the likelihood of you filing a claim multiplied by the potential loss. Even if the odds of you filing a claim are only 1% and a total loss is $100k which would make your expected loss from a fire, etc. $1,000, you have a lot of room in your premium payments above only $100 per year to make renters insurance a value added proposition if you wanted to look at it strictly from a finance perspective. And, that does not even consider the added value of peace of mind for you and your family that the insurance provides.

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Sean @ One Smart Dollar

Renter’s Insurance is a must. It’s so cheap and not having it can end up costing you a lot.

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R

Going to be totally necessary when I move into my bottom-floor duplex in L.A. My roommates and I are already splitting it

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Tom@BestCarCoverage

Thanks for the great overview on renters insurance. In my view renters insurance is a great investment for risk renters carry, many outside their control for things like theft and fire damage.

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Rich@MoneyWisePastor

As a landlord, I agree that renter’s insurance is a must for renters. I recommend – no beg – my tenants to get it. And as others have said, it is very affordable.

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Hank Coleman

My landlord requires it as part of our lease agreement.

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Jai Catalano

I have been a renter for my whole life. I have never had it.

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Hank Coleman

Wow, that’s just plain scary. To me, it is not worth the risk. $100k or so of coverage for $20 a month to protect my belongings from theft, fire, damage, etc. You may think that you and your family are very responsible, but what what is keeping the nut below you from burning the entire building down with all your worldly belongings in it?

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Financial Samurai

As a landlord, I couldn’t agree more. Renter’s insurance would have covered a robbery once. Gives me peace of mind too.

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Steve @ Grocery Alerts

It is important – although when I was renting it was not worth it for me (didn’t have enough assets to be worried about).

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Alex12

One of the great things about renter’s insurance is that it doesn’t cost very much. we can get decent coverage without c heaping out. Thanks for the great overview on renters insurance.

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