Do I Need Renters' Insurance?

Renters' insurance is designed to cover the possessions of people who rent homes from things like theft, damage, and destruction. It can certainly be a useful thing to have, although there are a few things you should think about before plunging into a purchase of renters' insurance. The first thing to consider is whether or not you could replace all of your possessions if they were stolen, lost in a fire, or damaged by a flood. The second thing to consider is whether or not you could pay for a liability lawsuit as a result of an injury in your home. If the answer to either of these questions is no, you might want to think about renters' insurance.

When you rent a home, your landlord is usually not responsible for what happens to your belongings unless damage is caused by his or her failure to maintain safe living conditions. For example, if you make a complaint about the condition of your hot water heater and your landlord fails to repair it and it explodes, you may be able to receive financial compensation for belongings damaged as a result of the explosion. If, on the other hand, your home is flooded in a natural disaster, your landlord does not have to replace your belongings or provide temporary housing.

If you purchase renters' insurance, it can cover you for things like fires, earthquakes, flooding, theft, and tornadoes, depending on the type of coverage you purchase. You may not think renters' insurance is necessary if you casually look around your home, but imagine having to purchase entirely new furniture, and replacing all of your electronics. Your belongings are probably more valuable than you realize. It can also protect you from liability suits, and potentially pay part or all of someone's medical costs if he or she is injured in your home.

As with other types of insurance, there are a number of different styles of renters' insurance. Most will have a deductible, for example, which means that you will have to pay a certain sum before your insurance kicks in. Depending on the insurance, you can insure your possessions for cash value less depreciation, or replacement value. Renters' insurance typically does not cover acts of negligence, and in a large claim, an inspector will probably visit your home to ensure that you are a genuine candidate for an insurance settlement.

Some renters' insurance policies cover damage from roommates and other tenants, which can be very useful. Some also pay for temporary housing in the event of displacement due to a natural disaster. These are all options you may want to consider when comparing policies; most insurance agents will be happy to provide you with an assortment of options which can be tailored to meet your needs. When you do establish a policy, you should photograph especially expensive items so that if they are damaged, stolen, or destroyed, you have proof of their original condition.