All renters should have their own personal property protection insurance, here’s why:
#1 – Your lease probably requires it.
Most leases require that tenants obtain renters insurance. If this requirement is included in your lease, and you sign the lease but do not purchase renters insurance, you are violating the terms of your lease. It’s that simple.
#2 – The landlord’s insurance does NOT protect a tenant’s personal belongings.
A lot of tenants believe that the landlord or property manager/owner is responsible for insuring the properties they rent. And it’s true, they are. However, the landlord or property manager/owner is only required to insure the rental structure and the land upon which the structure sits. The structure could be an apartment building, a condo, a home, etc.
This type of insurance is called homeowners insurance and it is a different type of insurance policy. If a covered event like a fire or wind storm strikes and causes damage to the structure, the landlord or property manager/owner will file a claim against the insurer that provided the homeowners insurance policy. The landlord or property manager/owner would then pay for necessary structural repairs using the money received from the insurer.
But if a tenant’s personal belongings were also damaged in that fire or wind storm, the tenant cannot file a claim against the landlord or property manager/owner’s homeowners insurance. The same is true if a tenant’s personal belongings were stolen from the rental property. To receive compensation for personal belongings, the tenant would need to file a claim against his or her renters insurance policy.
And guess what? If the tenant doesn’t have this type of insurance, he or she cannot file a claim. As a result, the cost of replacing any damaged or stolen personal belongings will have to come entirely from the uninsured tenant’s pocket.
Wait, there’s more
Depending on the policy, renters insurance might also covers tenants against certain types of liability claims. If a tenant’s dog bit a guest, for example, that guest could sue the tenant. Renters insurance can protect tenants from this type of litigation.
When you calculate the potential costs of foregoing renters insurance versus the cost of obtaining this type of insurance, you’ll quickly realize that having renters insurance is a much better deal!