Understanding Renter’s Insurance and Why it Works for You

Renters Insurance

We’ve all been there. You receive a lease agreement from your future landlord with terms that lay out each party’s responsibilities and expectations during the lease term. But there is always one clause that is often optional and not always considered before moving into a new home: purchasing renters insurance.

What is Renters Insurance?

When renting a property, your landlord should have some kind of property insurance. Their insurance policy will protect the property in case of a fire, hail, flooding, or other natural disasters. However, it will not cover any of your personal belongings. In order to receive compensation for losses to their personal items, renters would need to have their own insurance policy. Renters insurance is property insurance that protects tenants’ personal property inside a leased dwelling. Its policies cover personal property and liability coverage so long as the injuries are not structurally related.

Why Do I Need Renters Insurance?

Unlike when you lease a car, renters’ insurance is not always mandatory but is strongly recommended. Your lease agreement may or may not require a renters insurance policy. If it is required by a clause in your lease agreement, you must maintain an active policy throughout your tenancy in the rented space.

A renters insurance policy will:

  • Protect your personal property from theft, vandalism, fire, and other disasters.
  • Provides coverage for any liability if someone is injured while inside your unit. It will cover medical and legal expenses that otherwise would come out of your pocket.
  • Provides accessible temporary housing, like hotel rooms or other rental expenses, if your rental unit becomes uninhabitable for whatever reason.
  • Be affordable. For many renters living on a tight budget, renters’ insurance does not break the bank and provides significant coverage.

Overall, renters insurance provides valuable protection for your personal belongings and liability coverage, and it’s a small price to pay for the peace of mind it offers.

How Renters Insurance Works

A renters insurance policy works similarly to an auto insurance policy. You must contact a company that sells renter insurance policies and determine which one is right for you. Renters must consider coverage limits, types, deductibles, and premiums before purchasing. There are two types of coverage included in a renters insurance policy: personal property coverage and liability coverage. Once you determine the policy terms that work for your needs, you will purchase it like any other form of insurance. The insurance terms will state the premiums and deductibles, coverage amounts, and how you would file a claim.

If you were to file a claim, your insurance provider would complete their assessment and reimburse you for your qualified losses as per the terms of your policy.

Personal Property Coverage

This type of insurance coverage comes in handy when you least expect it. Personal property coverage includes your furniture, electronics, clothing, and similar items against theft, vandalism, and some natural disasters, as described in the terms of your policy.

Liability Coverage

Unlike personal property coverage, liability coverage protects you from losses if someone gets hurt inside your rented unit. The coverage by this portion of your insurance policy will pay for the other party’s medical expenses and legal fees created due to their injury.

One thing to note is that liability coverage does not cover if there is an injury due to a structural issue. For example, if someone were to slip and fall inside your house after you mopped the floors, your policy would cover it. But, if they were to get hurt because the porch they were standing on collapses, the liability would likely fall on the property owner’s liability policy (landlord).

Ready to Move into Your New Home?

Kajen Rentals is your local Louisiana property management company. If you are looking for your next home in Monroe, West Monroe, Bastrop, or Oak Grove and have questions about renting one of our properties, contact Kajen Rentals today. We are happy to help.