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What are the Benefits of Getting Renters’ Insurance for my Rental Property?

What are the Benefits of Getting Renters' Insurance for my Rental Property?

It is fairly standard to purchase insurance for the property you own, such as a motorcycle, house, or vehicle. Although it may sound strange at first, there are also situations in which you should insure property that you don’t own. Renters’ insurance falls into this category. You don’t own the space you are living in, but that does not mean you shouldn’t have an insurance policy applicable to that space. In fact, purchasing renters’ insurance is one of the smartest ways to protect yourself as a renter.

What Is Renters’ Insurance?

Renters’ insurance is an insurance policy taken out by the individual or individuals who are renting a piece of real estate. That real estate could be a house, an apartment, or even part of a duplex. This is separate from the property insurance policy that the property owner should hold. Property insurance exists to protect the owner of the property. Renters’ insurance exists to protect the tenant. Regardless of the property insurance the property owner holds, you should take out your own renters’ insurance policy.

There are three major risks that renters’ insurance protects you against. They are damage to your personal property, liability for injuries incurred on the property, and loss of use of the space. You’ll learn more about each of these risks and protections as you review the benefits of renters’ insurance, below.

What Are the Benefits of Renters’ Insurance?

Renters’ insurance tends to be very affordable. Costs vary based on the size and value of the space you’re renting, the personal property you own, and the amount of liability coverage you select. However, you can expect the yearly premiums to be several hundred dollars, at most. As such, renter’s insurance is a very wise buy, and it comes with the following benefits.

Personal Property Protection

If a fire were to break out in your apartment, or if the space were to become ruined by a natural disaster, the property owner’s insurance would cover the structure itself. However, it would not cover your own personal property that was damaged by the disaster. Property insurance would not reimburse you for your damaged couch, your burned clothing, your broken electronics, and so forth. The cost of these items can really add up. Even if you don’t own many high-end items, it would likely cost you tens of thousands of dollars to replace everything you own.

Renters’ insurance protects your personal property in case of a fire, natural disaster, or other mishaps. It also protects you against theft. For instance, if someone were to break into your apartment and steal your electronics, a renters’ insurance policy would reimburse you for the loss.

As unlikely as theft, fires, lightning strikes, explosions, and windstorms may seem, they do happen. If they happen to you, renters’ insurance makes them much less of a financial threat.

Liability Coverage

If you have visitors over to your rental home and one of them becomes injured, you could, in some circumstances, be held liable for their medical bills and lost wages. The costs associated with these damages can be astronomical. However, renters’ insurance protects you from this liability. If someone is injured on your property, whether it is a guest or a delivery person, renters’ insurance will cover any resulting costs.

Most renters’ insurance policies cover up to $100,000 in liability. However, you can increase this limit if you prefer. The cost of additional liability coverage is usually pretty negligible considering how much protection it offers.

Loss of Use Coverage

Say your rental space was damaged in a fire or other disaster. You would need somewhere else to live while it was being repaired and made habitable again. While you might hope your landlord would provide you with a place, this is not always the case. Renters’ insurance, however, generally covers the cost of living elsewhere if you are displaced from your apartment. Your insurance policy should pay for a hotel room and other associated living expenses until you’re either able to move back into your rental, or find a new one.

When you’ve just had a fire or other disaster damage your apartment, having this coverage feels like a breath of fresh air. The last thing you want to do in a situation like this is scramble to find the funds to pay for a hotel.

Other Benefits

In addition to including the key coverages discussed above, renters’ insurance offers a few other small benefits. Most policies cover your personal property even if it’s not in the rental at the time of damage or loss. Say, for example, you’re traveling with your laptop, and it is stolen while you’re waiting in the airport. Renters’ insurance will cover it. This peace of mind is worth a lot.

Many landlords require that their renters purchase renters’ insurance. Or, in some cases, they may give you a discount on your rent if you provide proof of this coverage. You may even save more on your rent than you pay for the insurance policy, creating a win-win scenario.

Some renters’ insurance also covers credit card fraud and check forgery. This is great coverage to have in modern times, so make sure you ask for it when working with an insurance broker. If your credit card information is stolen, credit card companies are generally required to reimburse you for any fraudulent purchases. However, there can be a long waiting period and additional costs involved, which makes having renters’ insurance with this coverage very convenient.

Another type of coverage to discuss with your insurance broker is water backup coverage. Not all renters’ insurance policies offer this coverage by default. If your items were to become damaged by a sewage backup or water line break, they could be rendered useless. Adding water backup coverage to your renters’ insurance policy ensures you’re protected in these scenarios. Note that water backup coverage is separate from coverage that protects your property in case of a storm or flood-related water accumulation.

Purchasing Renters’ Insurance

The bottom line is this: if you rent, you should have renters’ insurance. It reduces your financial risk and your stress burden if the worst should happen. Renters’ insurance is quite affordable, and a qualified insurance broker can work with you to craft a policy that suits your individual needs. They’ll consider the property, your financial situation, and your lifestyle to recommend the best coverage.

If you’re looking for renters’ insurance in Florida, don’t hesitate to contact Flagler County Insurance Agency. We’ve been in business for over 100 years, and our brokers take a personalized approach. We’ll help you find an affordable renters’ insurance policy that serves your needs, and we’ll be here for you if you ever need to file a claim.