With the seemingly ceaseless prosperity of the real estate market, renting continues as a popular style of living. And many renters know that renters insurance is required to rent an apartment, at least in most large apartment complexes. They also know that it’s at the very least a good idea to have renters insurance if you’re renting from an independent landlord. But most renters truthfully know very little about what renters insurance is, what it covers, and what the difference is when compared to landlord insurance.
Weed Ross specializes in pretty much every type of insurance that’s out there—but we don’t like to brag, we just like sharing our expertise. So when it comes to renters insurance versus landlord insurance, or why renters insurance is crucial to have as a renter, we have the answers. Below, we’re covering the basics and the need-to-knows about renters insurance, so you don’t have to look any deeper into these topics. Welcome to Renters Insurance 101.
In this article, we will cover:
- What is Renters Insurance?
- How Does Renters Insurance Work?
- What Exactly Does Renters Insurance Cover?
- What’s the Difference Between Renters Insurance and Landlord Insurance?
- Why is Renters Insurance Required?
What is Renters Insurance?
A type of financial safeguard insurance, renters insurance protects a renter’s personal belongings from dangerous events and incidents. Renters insurance can also provide compensation for injuries that happen at the rental property, or in the event that someone sues the renter for any sort of negligence. If you’re renting a property and any of your belongings are stolen, broken, or damaged, the holder of the renters insurance policy may file a claim to have the costs of the damages covered by the carrier, depending on the details written in the policy. Renters insurance can be paid a full year in advance or on a month-to-month regimen, but because it is often one of the less expensive types of insurance policies, many renters opt to pay for a year at a time.
How Does Renters Insurance Work?
Renters insurance helps to cover loss of possessions through reimbursements. The amount provided depends on the type of renters insurance policy, as well as the type of loss that was incurred. Renters insurance will either provide actual cash value, or the value of the item at the time of the damage or loss; or replacement cost coverage—the replacement value of the original item.
What Exactly Does Renters Insurance Cover?
Renters insurance policies offer a variety of unique coverages and protections. In theory, renters insurance is much like home insurance, but focuses much more on personal belongings, along with some other notable distinctions. But basic renters insurance policies typically include:
- Personal Possession Coverage: Renters insurance covers several personal possessions in the event of damage, destruction or theft. These possessions normally include furniture, toys and games, tools and equipment, personal appliances, clothing, electronics, and more.
- Liability Coverage: Renters insurance liability coverage offers protection for visitors to the rental dwelling, should they become injured on the property. Liability coverage under renters policies can also cover lawsuit expenses related to these types of injuries.
- Loss of Use Coverage: Renters insurance commonly provides a type of coverage known as loss of use, which refers to a situation in which the renter is unable to continue living in the structure and has to move to a temporary living alternative. Loss of use coverage covers hotel or alternative rent expenses under these circumstances.
What’s the Difference Between Renters Insurance and Landlord Insurance?
The main difference between renters insurance and landlord insurance is that renters insurance policies cover the personal belongings, or the contents of the dwelling. Landlord insurance covers the dwelling itself, much like home insurance, except the landlord or apartment owner isn’t actually living there. These two distinct types of insurance policies are set up this way because in a rental scenario, each party has different things that need protecting.
Why is Renters Insurance Required?
Many landlords or apartment complexes require renters insurance, typically for one primary reason. While most landlords and apartment complexes have their own insurance policy to protect their property, they require their renters to protect their own belongings so that they can avoid high premiums. This is because more protection means less liability for the landlord or business.