Over one third of the households in the United States are renting a place to live. According to an article on the website ipropertymanagement.com (October 17, 2021), 36% of American households are renting their home, signaling an apparent decline in homeownership this past year. Home values have gone up making affordability more difficult, so more are renting.
Who Needs Renters Insurance?
Everyone who rents a property to live in on a full-time or long-term basis should have renter's insurance. A homeowner who owns a rental property should switch their insurance policy to a landlord policy. To purchase a homeowner's insurance policy, you must live in the home. If you do not live in the home and are renting it out on a full-time basis, you need a landlord policy. In a recent article on allstate.com, it states a landlord policy only covers the building itself and other structures on the property, such as sheds or fences. It does not cover any of the furniture, clothing, or other belongings inside the home. So, if you are renting a home and there is a fire, your furniture, clothing, and other belongings will not be covered if you do not have a renters insurance policy.
Why Renters Insurance is Important to Have and What it Covers
It is important to have renter's insurance because you want your belongings covered in case of a fire, flood or other damage. Renters insurance covers your personal property. It basically covers everything on and inside the walls of the home. It will also cover no-fault injuries that occur on the premises. For example, if you have a guest over for dinner and they slip and fall on the kitchen tile, their resulting injuries will be covered if necessary.
What Renters Insurance Does Not Cover
Renters insurance does not cover the actual structural damage to the building or home. It does not cover other structures built on the property either. For example, if there is a storm causing hail damage to the roof of the home and the wind causes the fence to fall, renter's insurance will not cover that damage. The landlord insurance policy will cover that damage. When you sign a lease to rent a home, it is a good idea to be sure the owners have landlord insurance.
What Does Renters Insurance Cost?
Based on the National Association of Insurance Commissioners (NAIC) survey, renter's insurance costs about $15 a month for approximately $35,000 in coverage limits. You should talk to your insurance agent about the value of your belongings to determine the best coverage. If you live in a larger rental home and have quite a bit of expensive furniture, you may need higher coverage limits.
The homeowner will protect his home value with a landlord insurance policy. You should protect your belongings with a renter's insurance policy. In fact, your landlord may require you to have renter's insurance. The cost of renters insurance is typically less than the cost of a fast-food meal for your family.