What Is Renters Insurance?

What It Is and Why You Need It

Whether you rent by yourself or have a house full of roommates, renters insurance offers protection in case you need it. It can provide added peace of mind in the event of an accident or natural disaster. But, even if your roommate or landlord has renters insurance, you're not covered; you need your own policy.

Can you imagine coming home after a long day only to discover that your apartment was destroyed by a fire that began in a neighboring unit? Because fires can often cause irreparable damage, you may lose many or most of your personal possessions. The good thing about a renters insurance policy is that it may cover your personal possessions whether they're damaged or lost.

After an unexpected accident or natural disaster like a hurricane or tornado, you may have to find a new apartment until yours can be repaired. That's the other great thing about renters insurance: It includes loss of use coverage for any necessary increase in living expenses incurred by you as well.

Do I Need Renters Insurance?

You may be thinking that you don't have a lot of stuff, or that it wouldn't be too expensive to replace what you do have. But, if something were to happen, the cost of those individual items can really add up in the end. In fact, the cost to replace lost possessions typically falls between $15,000 and $35,000, which is more than most people expect.

Renters insurance protects you in other situations too. It may cover things like medical bills for a friend or guest who slips and falls on a small puddle of water in your kitchen, and damages for charring a neighbor's balcony if you get distracted while grilling.

Altogether, that's protection for your personal possessions, possible loss of use of your residence and liability. So whether you're affected by a fire, water damage or flooding in your kitchen from a leaky roof damaged in a windstorm, renters insurance is a small price to pay for the peace of mind that comes with it.