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What is Renter’s Insurance and Why Do You Need It?

  Are you renting a home or an apartment? If so, you need an insurance cover to protect your belongings against damage. Many tenants mistakenly assume that their landlords’ property insurance covers their belongings as well – this isn’t true.

Your landlord’s property insurance only covers structural damage – whether the structure is a duplex, a house, or an apartment.  A renter’s insurance policy will cover your personal property. As a tenant, it’s your responsibility to find and pay for it. According to a poll by the ORC International, only 37% of renters have a renter’s insurance.  This is in steep contrast to 95% of homeowners who have a homeowner’s insurance. Why do few tenants have a renter’s insurance? Well, one reason is that many renters misguidedly assume that the landlord’s policy covers them as well.  Another reason is that many renters underestimate their belonging’s value. It’s likely that the value of your electronics and clothing alone would get into the thousands of dollars.  Many renters also overlook liability. A person injured while in your property could easily sue you for damages. It’s for these reasons and many others that make a renter’s insurance necessary for you.

What Is Renter’s Insurance?

This is the type of insurance policy that protects your personal property against accidental damages. Much like other insurance policies, you’ll choose the coverage and deductible amount, and then pay monthly premiums based on these and other factors.  Of course, the coverage amount should be directly proportional to your belonging’s value.  Typically, a renter’s insurance covers damage against utility malfunctions, vandalism, theft, fire, weather-related damage, and a host of other risks.  However, a standard renter’s insurance won’t cover perils like earthquakes and flooding. To cover these, you’ll need to subscribe to a separate policy. Also, your renter’s insurance won’t cover anything not listed in the policy.  For example, if water damage resulting from defective plumbing isn’t covered, then the policy won’t cover you in the event that it occurs.


Top 5 Reasons Why You Need to Get a Renter’s Insurance:


1.   It covers you from liability.

If a friend, neighbor, or the pizza guy gets injured while on your property, the renter’s insurance policy has you covered against any ensuing liabilities. The policy will pay for the medical bills.  Often, medical-payments coverage is between $1,000 and $5,000. However, you could ask for a higher coverage if necessary.


2.   Your landlord may require it.

An increasing number of landlords are making a renter’s insurance mandatory. For this reason, the next time you apply for a rental, don’t be surprised when the landlord asks for it.  They may even require proof.  In some cases, it could be the landlord’s idea. However, in others, the landlord’s insurance company could be the reason behind it. The idea being some responsibility can be shifted away from the landlord if the tenants are covered themselves.  However, if you are new to all of these, there is absolutely no reason to worry. Most landlords will be glad to help.


3.   Your personal belongings are covered.

A renter’s insurance policy will cover losses in your personal belongings, including electronics, furniture, computers, luggage, jewelry, and clothes. Even if you underestimate how much you earn, it can quickly add up to a lot more than you realize.  In fact, estimates that every tenant owns personal property amounting to about $200,000.  Unknown to many renters, a renter’s policy covers against a surprisingly long list of perils. For example, a standard HO-4 policy covers losses to personal property from perils like:

·         Windstorm or hail

·         The weight of ice, snow or sleet

·         Volcanic eruption

·         Vandalism or malicious mischief

·         Theft

·         Smoke

·         Riot or civil commotion

·         Fire or lightning

·         Falling objects

·         Explosion

·         Damage caused by vehicles

·         Damage caused by aircraft

·         Water or steam damage from things like household appliances, air conditioning, heating, plumbing or fire-protective sprinkler systems


4.   It’s affordable.


Did you know that the average policy will only cost you about $187 annually? Now, that’s pretty affordable!  Obviously, your actual cost will depend on various factors. For instance, the deductible amount, the type of coverage you choose, how much coverage you need and where you live.  If you live in North or South Dakota, then you should expect to pay an average of around $117. If you live in Mississippi, then you should expect to pay an average of around $252 per year.


5.   It’ll help you avoid serious financial loss.

Imagine how much you could lose in the unfortunate event that your apartment is razed by fire. How much would it cost to replace your electronics, clothes, and furniture?  Needless to say, that could be a hefty total. With a renter’s insurance, you can rest assured knowing that all your personal belongings are covered against most perils.


There you have it! 5 solid reasons why you need a renter’s insurance. While renter’s insurance may be optional, it’s an option that you should always take. It’s inexpensive, versatile, and provides wide-ranging benefits. 


Please call Clayton Insurance Agency today for all of your insurance needs,   Sanford Office # 919-777-9835 or Pittsboro office # 919-533-6920.

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