While homeowners insurance is considered a necessity, the majority of renters aren’t covered by renters insurance. That number is closer to 40 percent among millennials. And while cost is an important consideration, renters insurance is typically quite cheap. On average, it costs less than $150 per year.
So why don’t more renters have insurance? Surprisingly, the main barrier to getting a plan for most renters is a simple lack of awareness. Many either don’t understand the benefits of renters insurance or how to get coverage.
Since renters insurance only recently gained popularity, it’s less widespread than other forms of insurance, such as homeowners, life, or car insurance. But, once you have some basic knowledge about it, finding an affordable renters insurance plan is easy.
What is Renters Insurance?
Renters insurance was originally created to reach a more equitable solution for both tenants and landlords. Tenants are protected from potentially high costs resulting from an incident, while landlords don’t have to pay for damages out of their own deductibles. It’s a small cost for tenants that significantly mitigates the risk on both sides.
What does Renters Insurance Cover?
Many people aren’t aware of what their landlord’s policy covers, much less what they can get out of their own renters insurance plan. If your personal items are stolen, destroyed, or otherwise damaged, the landlord is only responsible if they contributed to the problem. For example, if they don’t fix the locks in the case of a burglary, the landlord is likely to blame.
Renters insurance is much more likely to provide coverage in these situations, regardless of fault. The average renter has more than $20,000 in personal items, underscoring the importance of such a policy. Take a thorough inventory of your possessions before getting personal property coverage so that you’re protected even in a worst-case scenario.
Mandatory Insurance for Renters
Since the benefits of renters insurance have become more clear, insurance companies have began pressuring landlords to require it from all tenants. They can include it in the conditions of the lease, including terms indicating the minimum amount of coverage.
Renters Insurance Providers
It’s often easy to add renters insurance to your existing plan with your current insurance company, but you can also get it separately. There are many different companies that provide renters insurance, and each provider will vary. Compare the benefits and drawbacks of each potential plan before making a final decision.
Filing a Claim
Insurance is there in case something goes wrong, but you should weigh the pros and cons before making a claim. If the insurance company thinks you’re abusing the plan, they will likely either raise your premiums or outright cancel your plan. You should try to only make claims once every few years, if not even less frequently.
Before filing, you need to report what happened to your landlord. This is often legally required or otherwise indicated in the policy. If a crime was committed, you should also file a police report. After carefully documenting the incident with pictures, receipts, and other information, contact the insurer as soon as possible to begin the claims process.
Renters insurance is a great option that benefits both tenants and landlords alike. If you’re a landlord, you should consider making it mandatory for tenants. Even if it’s not, it’s a good idea for tenants to get coverage to ensure they’re protected if something goes wrong. This provides peace of mind for both parties, knowing that they’re protected from what could be extremely costly in the case of an incident.