Fewer home buyers highlights the need for renters insurance

(BPT) – The rental housing market in the United States has reached a 50-year peak, with more than 114 million Americans living in landlord-owned properties. Renting a house, apartment or condo means that the ownership of that property belongs to someone else — the landlord.

“A common misconception is that a landlord’s insurance policy for the property eliminates the need for renters to purchase their own insurance,” said Bonnie Lee, vice president of Property Claims at Mercury Insurance. “In reality, your landlord’s insurance does not cover your personal belongings or any liability claims against you. While you may not be liable for repairing the rental property after a covered loss, your personal possessions may still need replacement if they are damaged or stolen.”

Renters insurance is relatively affordable. The actual cost will depend on several factors, such as the type of coverage you choose, how much coverage you buy, and the amount of your deductible, otherwise known as the amount you agree to pay before a claim is paid. Mercury Insurance, for example, offers coverage for as little as $10/month, but the amounts may vary by state.

Renters insurance offers three key areas of protection:

• Theft and vandalism: Renters insurance protects your personal belongings, electronics, jewelry and unique collectibles against damage or theft. In these instances, your rental policy can step in, compensating for losses so that items can be repaired or replaced.

  “Renters should keep an up-to-date inventory of their possessions, including new purchases and gifts,” said Lee. “Smartphones can be a tremendous aid in this process, by simply walking around your place with the video camera on. Take photos, provide descriptions of these items including serial numbers and copies of receipts when possible. Building an inventory of what you own will prove invaluable in the unfortunate event of an unexpected loss.”

• Natural perils: Renters insurance covers damage to property and personal belongings due to natural events like fire, lightning, hail and sudden water overflow. If your rental becomes uninhabitable due to these occurrences, you may be eligible to receive compensation for living expenses. Note, however, that renters insurance does not cover personal property damage from floods or earthquakes. You must purchase a separate policy if you live in an area prone to any of these types of perils.
• Liability protection: You may be protected financially if you cause bodily injury or property damage to others due to a covered incident — either on the rental property or elsewhere — by your renters insurance. You may be covered for legal defense costs if you are sued for injuring someone on your property, such as if a guest trips and falls while in your rental.

Renters insurance can provide peace of mind and protection against other financial losses in times of crisis.

• Coverage while traveling: Renters insurance not only safeguards your possessions at home but may also offer protection while you are away. If a valuable item such as your laptop was stolen from your hotel room while on vacation, your policy may cover the loss.
• Financial protection: An unexpected event, like your dog biting a neighbor, may lead to a lawsuit. Renters insurance may cover damages up to your coverage limit in addition to legal bills.
• Neighbor-related incidents: Despite your best efforts to keep your rental property safe, the actions of your neighbors are beyond your control. For example, if your upstairs neighbor leaves the stove on, resulting in a fire that destroys your belongings, you would bear the loss without renters insurance. A rental policy can provide protection against such an unexpected incident.

“When considering rental insurance, it’s important to understand what it covers and to ask your agent about available discounts, deductibles and coverage limits,” said Lee. “It’s a small investment that gives renters an invaluable peace of mind, knowing that their treasured belongings are protected.”