Do you know someone who owns a house and doesn’t have homeowners insurance? Most likely, you don’t. That’s because if someone has a mortgage, their lender requires the home is insured. Which makes sense. If the house burns down, the lender’s money goes up in smoke.
In the world of renting, renters insurance is just as important, but few people understand exactly why.
Let’s start with the basics. Renters insurance protects renters and landlords.
For starters, renters insurance covers a renter’s personal belongings, something a landlord’s property insurance doesn’t cover. Without renters insurance, a renter would have to pay to replace everything stolen in a burglary or damaged by a fire. Renters insurance will also cover the cost to replace a stolen bicycle or laptop, even if the theft happens someplace other than home.
It also protects renters from liability if they accidentally damage their place. If a renter accidentally starts a kitchen fire or overfills the bathtub, with renters insurance they won’t be liable for the damages, even if they damage a neighbor’s place.
What many people don’t know is that the liability coverage benefits landlords, too. Without renters insurance, a landlord could be responsible for the cost of damages and repairs if their renter accidentally damages the property.
It’s important that renters carry renters insurance. Just like mortgage companies require homeowners insurance, most landlords require renters insurance in their leases. If possible, landlords should verify that renters have a current policy.
With renters insurance, both renters and landlords can relax knowing they’re covered. That means less stress all around!