Is Renters Insurance Mandatory?

Mandatory renters insurance used to be rare, and landlords who requested tenants to have it had a hard time finding occupants for their apartments. However, it is a completely different scenario today, and renters insurance became a part of the rental process, just like a first month’s rent check or a security deposit. Landlords expect tenants to have renters insurance and they are oftentimes happy to assist them with finding coverage. One popular thought behind that is that if the tenants are covered themselves, some responsibility can be shifted away from the landlord.

Regardless of its popularity, having renters insurance is a great idea because your landlord’s insurance covers the structure itself and the grounds, but it doesn’t take your personal belongings into account. A lot can happen in life, and your things can get seriously damaged or stolen, for reasons beyond your control and best effort. According to a research from the Insurance Information Institute, only 37% of renters have renter’s insurance while 95% of homeowners have a homeowner’s insurance policy. It definitely goes to show that homeowners have a better understanding of the different unexpected events that can happen, and the consequences to those events scare homeowners more than they do tenants.

Your landlord’s insurance covers the structure itself (whether it’s an apartment, a house or a duplex) and the grounds, but not your personal belongings. Tenants may have items of value, such as computers, clothes, electronics, and jewelry, and the cost of replacing these items can be high and unexpected. Even if you don’t feel that you have items of value, in case that you will have to replace your things and buy new, the added up cost would be painful to any wallet.

That is why the affordability of renters insurance is an important point to remember. According to a survey performed by the National association of Insurance Commissioners, the average renter’s insurance policy costs $187 a year. The final cost is a personal matter because it depends on many factors, such as the deductible and the type of exact coverage you choose to get, as well as on the state you live in. In a poll done by Esurance website it was shown that the average renter owns about $20,000 worth of personal property, so if you compare that to the affordable payments of renters insurance, it becomes more clear that checking it out is your best bet. Don’t wait for the unexpected to happen or for your landlord to demand it. Be wise about it and buy a policy, to have a peace of mind that you will not have to suffer a major loss and damages.