Who Needs Renters Insurance? Aug 12, 2020 People decide to...
Aug 12, 2020
People decide to rent a home instead of buying one for many reasons. Some individuals have low income or poor credit and simply do not have enough money for a down payment or good enough credit to secure a loan. Others do not want the responsibility of homeownership and prefer to leave the big tasks to someone else. Generally speaking, the homeowner or property manager is responsible for day to day repairs and upkeep, and most property owners have homeowners insurance in place to protect their investment. However, these policies often do not cover the renter, their guests, or their personal belongings, and additional personal insurance is necessary to protect from both physical and financial loss. It is particularly important to secure renters insurance for the following situations:
Though most homeowners insurance policies protect against theft, they only cover the named person or persons, which are generally the owners of the property and their immediate family. Any property belonging to a tenant or guest will be covered only by those individuals’ own personal insurance policies. Individuals who do not own any valuables may feel that this protection is unnecessary, but many policies also cover theft while you travel, which can prevent you from getting into very difficult situations.
Even if you do not have a lot of particularly valuable items, replacing them all at once can be impossible, especially if you are renting due to low income. A fire or flood could leave you without any clothing or furniture, and you would not be able to function for very long without these bare essentials. Such a disaster would also likely leave the home uninhabitable for a period of time, and the addition of “loss of use” coverage could secure you temporary housing in a hotel so that you will not find yourself homeless.
Sometimes the damage to a home is caused by human error. Homeowners insurance will often not cover damage to the property caused by someone other than the named policyholder or their immediate family members beyond reasonable wear and tear. In these cases, the homeowner would have no choice but to sue you in order to recover their losses, and this could be financially devastating both in the immediate moment and in the future. Just as with theft, your personal insurance policy could also cover damage you cause in someone else’s home.
Accidents can happen at any time. If you have a friend or family member visiting and they slip and fall or incur another injury in your home and do not have personal insurance, you could, again, be legally liable. Medical bills can pile up quickly, and most renters simply do not have that kind of money to lay out without notice.
Because homeowners insurance policies do not cover a number of situations, many landlords require their renters to carry a certain amount of renters insurance. Check your lease carefully so that you know exactly what is expected of you before you sign anything.
So, if you are wondering whether renters insurance is absolutely a necessary expense, the short answer is “yes”. The amount of coverage you need will depend on legal requirements and your specific situation and there are many variables from policy to policy such as coverage amount, deductibles, and other clauses. Usually, additional personal insurance can be purchased to cover any existing gaps in your policy.
If you are ready to take the next step in protecting yourself as an Illinois renter, contact Oliver & Associates, where our customers are like family.