The Pros and Cons of Renters Insurance

Insurance of any kind is a protective means against theft, disaster, accidents and any other damage that the insured property may encounter. This is true whether you’re talking about life insurance, car insurance, property and casualty insurance or some other type of insurance. But when you’re a renter, is insurance needed? What are the advantages and disadvantages? Is insurance coverage really all that necessary for renters?

Pros of Renter's Insurance

1. The main purpose and benefit of having renter's insurance is that it covers the loss or damage of your personal property or the contents of your apartment, house or dorm room that you are occupying and paying rent to live in.
2. Renter's insurance also protects your personal property against the actions of your roommates or other tenants.
3. Coverage will vary by provider but most renter's insurance policies cover loss or damage to your property for almost any reason. Flood insurance is usually a separate policy or at an additional cost to the renter's insurance policy.
4. Renter's insurance is relatively inexpensive. Since the cost to replace your personal items is much greater than the cost of the renter's insurance policy, it is a very cost effective way to protect your personal property and your personal wealth in case of an accident, natural disaster, theft, etc.
5. Some policies allow roommates to be on the same renter's policy, while other policies require roommates to be on separate policies.
6. If you obtain your renter's policy from the same insurance company where you have other coverage like your auto insurance, many companies will provide you with discounted rates.
7. Renter's insurance coverage goes above and beyond covering the loss or damage of your personal property. Some policies cover other areas of loss or injury such as: 

·        Traveler’s insurance: Covers your property if lost or damaged while traveling. For example, if the airline loses your luggage some policies cover the loss of your bag and its contents.
·        Medical payments: If someone visiting your property is injured some policies will cover the payments of their medical bills (up to a certain limit, which depends on your coverage). This coverage does not apply to anyone living in the home. It only applies to visitors.
·        Liability coverage: This coverage protects you against a lawsuit if someone visiting your property is injured.

 Cons of Renter’s Insurance 

1. Most renters' insurance policies do not cover flooding. A flood policy has to be purchased separately or at an additional cost to the renter’s insurance policy.
2. Roommates may have to obtain their own individual renter’s policy. Some policies do not allow renter’s in the same apartment to be on the same policy.