It's standard practice for anyone who owns a home to purchase a homeowners insurance policy. In fact, securing homeowners insurance is usually a mandatory part of getting approved for a mortgage. Renters insurance, on the other hand, is generally considered optional (though some landlords do mandate it). While you may not be compelled to buy it, here are a few reasons why it really pays to invest in a policy.
1. It protects you from losses when your belongings get damaged or stolen
Your landlord's homeowners insurance will cover any damage to the property itself that's sustained due to fire, flood, or a weather-related event. But that homeowners insurance policy won't cover your personal belongings, like your furniture, electronics, and other valuables.
The only way to protect those items is to purchase renters insurance. That way, if the building you live in sustains damage, you won't be out of luck if your belongings are destroyed in the process. Furthermore, if someone breaks into your home and steals items of value, your renters insurance policy will usually cover the cost of replacing them.
2. It's generally affordable
While a homeowners insurance policy can easily cost well over $1,000 a year, renters insurance is a lot less expensive. In 2017, the average cost of renters insurance in the U.S. was $180 a year, according to the National Association of Insurance Commissioners. Of course, the amount you spend on renters insurance will depend on the level of coverage you opt for, but you should know that a decent policy probably won't break the bank.
3. It provides liability coverage in case a guest is injured in your home
Another big reason property owners buy homeowners insurance is to protect themselves from liability in the event that someone is injured on the premises. A renters insurance policy can do the same for you, protecting you from losses if an injury occurs in your rental unit that you might otherwise get sued over.
4. It may cover additional living expenses if you need to vacate your home
You never know when extensive damage might render your rental unit uninhabitable. If there's a fire in your building, for example, it could take weeks for the damage to be fixed. The same holds true if you rent a garden apartment and there's a massive flood.
Of course, you'll need someplace to live while your home is under repair, but paying for a hotel could get expensive. A renters insurance policy, however, may pick up the tab for your temporary housing arrangements, and that benefit alone could be a lifeline if a disaster strikes your home -- though keep in mind that in some cases, your landlord may be responsible for your relocation or temporary housing costs during repairs.
Nobody wants to take on extra expenses, but renters insurance is something you shouldn't skimp on. A modest investment on your part could save you from untold financial losses, not to mention give you the peace of mind you deserve as a renter.