Why You May Need More Renters Insurance Than Your Landlord Requires

Renters can't afford to leave themselves unprotected.

Landlords often require that tenants purchase renters insurance coverage. This requirement is usually meant to limit the landlord's potential liability. If someone is hurt by a renter's dog or in a renter's unit, that victim could potentially pursue a claim against the landlord. The chances of this are reduced if the tenant has insurance coverage.

Not every lease requires renters insurance, and the amount and type of coverage a landlord requires can vary. In many cases, renters may want to do more than buy the minimum insurance their lease mandates. Here's why.

Why would renters need more than the mandated renters insurance?

Renters shouldn't base their home insurance choices on the requirements set by a landlord -- although they should have at least the minimum amount of required coverage.

Rather than focusing on what is mandatory, renters should consider the amount of risk they are willing to take on, and the amount of risk they would rather transfer to an insurer. Renters insurance pays for many costs when problems develop, including:

• Damages resulting from injuries a renter is liable for. Renters insurance can pay for legal fees, court costs, and compensation if someone is hurt on their property and they are held liable.
• Replacement of a renter's property if it is damaged or destroyed. A renters insurance policy can pay for a tenant to repair or replace all personal possessions destroyed or damaged by a covered cause. This includes everything from sofas to electronics to clothing.
• Living expenses and loss of use costs if the renter's home is being repaired. Renters often incur extra costs if their apartment or rental property is damaged or destroyed. This could be the cost of hotels or meals out, for instance, if they don't have a functioning kitchen.

Without sufficient renters insurance coverage, a renter would typically have to pay these expenses out of pocket. A landlord's insurance would not cover them in most cases.

While a landlord should have insurance coverage in case people are injured in common areas, the landlord's policy typically doesn't extend to protect a renter from loss if someone is injured due to problems within a renter's home or injured by a renter's dog. And it doesn't typically cover a renter's personal possessions.

The minimum coverage mandated by the landlord may not be enough to replace all of a renter's possessions, or to ensure they won't face a damage claim above their policy limits.

No renter should be unprotected and at risk of losing their assets to pay damages or replace everything they own. It's crucial to consider coverage needs and get the insurance that's right for the situation.