If you’re a renter, you may think that you don’t need renters insurance. Technically, it’s your landlord’s building, and that makes the landlord responsible for anything that happens. Right?
Not exactly. Of your landlord’s many responsibilities, covering your losses typically isn’t one of them. But that’s why renters insurance exists: to protect renters from natural disasters, stolen property, and anything in between.
“Landlords strongly recommend—and in most cases, require—that their tenants purchase renters insurance,” according to Mike Mirandi, vice president of sales at TheGuarantors, a New York–based insurance company.
Think renters insurance is a frivolous expense? Think again. Here are the most compelling reasons why you should have a renters insurance policy.
1. Renters insurance is inexpensive
The amount you pay for renters insurance ultimately depends on where you live—but it’s only a drop in the bucket compared with how much you’ll spend on rent in a year.
“The average renters insurance policy costs under $150 per year for $30,000 of property coverage and $100,000 of liability coverage,” Mirandi says. “This is a relatively small price to pay to ensure your personal belongings are protected.”
That’s why Shannon Aalai, a licensed real estate salesperson at Citi Habitats in New York, says she always recommends renters insurance to clients after they sign a lease whether or not the building requires it.
“Renters insurance is a no-brainer because it’s so cheap, yet it covers so much,” Aalai says.
She says the payout could be in the thousands if something happens to your belongings.
2. Your landlord’s insurance won’t cover you
It’s a common misconception that, in the event of a fire or flood, your landlord’s insurance will cover your belongings.
“The truth is that a landlord’s coverage does not extend to the personal property of their tenants,” say Josh Sarnell, a licensed real estate salesperson at Citi Habitats in New York. “So, if your neighbor across the hall leaves a candle burning and a fire spreads and damages your home, replacing your electronics, clothes, and furniture is strictly your financial responsibility.”
Or, suppose there’s an issue with a burst pipe.
“If the water damages your possessions, you won’t get any compensation for your belongings through the landlord’s policy,” says Steve Pritchard, founder of Cuuver.com, an insurance comparison site. “Your landlord will only have to pay to repair the pipe, not for the damage that it caused to your possessions.”
The same can be said if someone breaks into your home. Let’s say someone kicks in your door, and steals your belongings.
“Your landlord will only be liable to pay for the damages the burglar caused to the property—like the broken door—but you won’t get any compensation for the belongings that were stolen,” says Pritchard.
So without renters insurance, you’re on your own to replace your valuables.
3. It protects you against personal liability
Renters insurance doesn’t cover just you; it also covers what could happen to someone else.
“It would protect you against personal liability for the injury you cause to someone else because of negligence,” according to Hank Wilson, founder of Wilson Insurance and Financial Planning in Philadelphia.
For example, let’s say someone slips and falls inside your home and takes legal action against you. Your renters insurance could help cover any liability.
But your liability isn’t limited to you and your immediate surroundings.
“This would include your pets or even your children causing harm to someone due to negligence,” Wilson says. “Your renters policy would even provide coverage for damage you accidentally cause to someone else’s property elsewhere.”