Only 46% of renters have Renters Insurance! We've partnered up with Lemonade to help fix this. We outline the top 5 reasons renters insurance is so vital.
Most people have homeowners’ insurance. It just makes sense. In fact, the Insurance Information Institute’s 2018 Pulse Survey found that “91 percent of homeowners in the US had homeowners insurance.”
Similarly, landlords insure their properties to protect themselves against damages and cover their liability. On the flip side, only 46 percent of renters surveyed had renters insurance despite it being a fraction of the cost.
Renters insurance is equivalent to homeowners’ insurance, but for tenants. It covers a tenant’s belongings and offers liability coverage if issues arise.
Every renter’s insurance policy is different, so it’s important that the tenant understand the policy and coverage they are getting from their insurer.
One of the main things that stop tenants from buying renters insurance is the misplaced belief that landlords insurance covers their belongings. Landlord insurance protects only the physical structure and any of the possessions in the rental that belongs to the landlord – commonly things like white appliances.
If the tenant doesn’t have their own insurance policy they won’t have liability coverage nor will their possessions be covered in the case of a fire or burglary. Because of this, it’s a good idea to inform all new tenants that they will need their own renters insurance policy.
Many tenants don’t buy insurance because they think the cost is prohibitive. However, renters insurance is one of the cheapest and easiest kinds of insurance to obtain.
Most renters insurance policies are in the range of $100 to $200 a year. However, some companies such as Lemonade make renters insurance much more affordable.
If a guest comes around, slips, and falls in the property, the tenant is liable. Most renters insurance policies offer liability protection to protect against this.
If a tenant doesn’t have insurance then creditors often come after the landlord to pay out – so, if your state allows it’s maybe worth requiring your tenants get to get insurance.
The amount of liability protection will obviously depend on the policy that the tenant takes out.
Depending on the policy renters insurance can protect a tenant’s belongings against fire or wind damage, for example, if a tree were to fall on the property or they lose everything in a house fire.
As we mentioned before, renters insurance is pretty affordable. There were 1,319,500 house fires in the US in 2017. It is a small price to pay for peace of mind.
A renter’s policy can also cover theft or burglary at their property. Again, the amount and type of coverage will depend on their individual policy.
There is a misconception that a landlords insurance covers the tenants as well. And many people never really give it a second thought. They’ll certainly have car insurance and health insurance, but they might simply never even think about renters insurance, merely assuming they are in some way covered.
It’s well worth talking to your tenants and making sure they understand they are not covered by the landlord’s insurance.
Renters insurance is pretty inexpensive. However, as with any insurance, it’s a gamble. You are betting that something is going to go wrong and hoping for the best. A lot of people simply aren’t willing to make that bet – it seems counter-intuitive. Instead, they’d rather take the risk of living without insurance.
They may know about it, but they never really consider it. There are many reasons for this, the top one being most people don’t experience issues that require them to file insurance claims. So it drifts to the back of their mind and they just keep putting off purchasing it to focus on things they consider more important.
If you’re anything like me you have a collection of old furniture that you’ve collected from various relatives. It’s old and probably not worth much. Many renters are the same, they believe that their stuff just isn’t worth insuring.
I’d beg to differ though. Instead of thinking about the value of the possessions, think about how much it would cost to replace these items. Tenants will likely have a sofa, a T.V., a laptop, and probably some nice clothes in the cupboard. These items’ values can quickly rack up into the thousands.
Renters insurance doesn’t cover everything. For example, most policies don’t actually cover the following (though you can normally get this coverage for an additional cost):
Renter’s insurance policies also do not cover losses caused by the tenant’s own negligence or intentional acts.
Because of this, it’s important for tenants to understand their policies properly.
With Sure, you get comprehensive coverage underwritten by Assurant, a leading insurance provider.
Your belongings will be covered against theft, loss, and most forms of destruction. Even if it’s in your car or with you on the go, you can make sure your things are secure.
If you hurt someone or damage someone else’s property, those expenses can add up quickly, renter’s insurance has you covered.
You can’t always control what happens inside your home, renters insurance covers reasonable medical expenses if someone is hurt on your property.