The Importance of Renters Insurance

The Importance of Renter’s Insurance

One of the most regretful mistakes a renter can make is to overlook the necessity for renter’s insurance. It is a common misconception that a renter’s personal property is covered under their landlord’s insurance policy. However, the cold hard truth is that the property owner’s insurance only covers the building and not the renter’s belongings. In the event of loss, your landlord may be able to relocate you, but your personal property is your responsibility. In addition, without renter’s insurance, you may even be held liable for any damage that was your fault.

What is Renter’s Insurance?

Renter’s insurance is property and liability insurance coverage for the non-owner occupant of a dwelling or an apartment. Renter’s insurance can save you several expenses caused by accidental loss that include personal property replacement, personal liability protection and even certain living expenses should you be displaced from your home. Also known as the HO-4 policy, it covers the renter in the event of loss caused by common perils like fire, theft or vandalism. It can also protect the renter’s liability in the event that the policyholder caused damage to any third party.

Named Perils

“Named Perils” are the events that are covered under the insurance policy. A policy that contains solely “named peril coverage” only covers the events specified and nothing else. Additional insurance may be needed for other damages or injuries. There are typically seventeen events that are covered under named perils. The most common named perils however, are fire, lightning, hail, windstorm, smoke, theft and vandalism. Depending on your location, certain disasters, like earthquakes and flooding are not covered under named perils and could require additional insurance.

Liability Coverage

Renters insurance also protects you from personal liability in the event that someone is injured in or around your property. If another party is accidentally injured in your home or by your property, this personal liability protection can cover the resulting medical and/or legal expenses. Without personal liability protection, these types of expenses can be financially devastating.


As with most insurance policies, there are certain types of limitations. If you reside in a flood zone, you may be required to obtain separate flood insurance. You should also consider the different types of coverage for personal property replacement. Some policies will only pay the depreciated value of your personal property, while others may be limited to a specific dollar amount. There may also be time limits stated within your policy in which you must file a claim for benefits. Your insurance provider will gladly explain all of the coverage options available to you, to best suit your needs.

With such economic uncertainty, peace of mind is invaluable. Renter’s insurance can provide you with the peace of mind and assurance that you will be covered when life’s unpredictable mishaps effect you or your loved ones. There’s an old saying, “the cheap gets expensive,” trying to save yourself a small monthly premium, could cost you thousands in the long run.