This is one of the most common questions many renters have asked over the years. Most renters, especially first-time renters, don’t have any idea what might happen if they don’t have a renters insurance policy. In fact, roughly 37% of renters own renters insurance, which leaves the majority of people without coverage. Here is a look at what might happen if you don’t have renters insurance.
What Happens If You Don’t Have Renters Insurance?
You need to know that you are not breaking any laws by not purchasing a renters insurance policy. Renters insurance is not mandatory. However, just because you are not legally required to have renters insurance doesn’t mean you shouldn’t consider getting it.
If you don’t have renters insurance, you risk losing your personal property, and your landlord’s insurance will not cover your belongings inside the rental. Your personal belongings can only be covered if you purchase a renters insurance policy, which is one of the reasons why it is important to get it.
To have a better understanding of what will happen if you don’t own a policy, let’s check out this scenario: you are living in an apartment building and don’t have a renters insurance policy. Unfortunately, the building catches fire. While you make it to safety, you lose all your belongings in the fire. What can you do? Well, since you have no coverage for your belongings, your things are gone. Your landlord will simply file a claim and use the money for repairs.
Why Do You Need Renters Insurance?
While you may think your personal property won’t cost you much to replace after an incident, you’d be surprised at how all these things can add up. And, in the case someone is injured at your place, you could be sued and held financially responsible for the damage. Renters Insurance has liability coverage that can help you pay for medical expenses, legal fees, or property damage if you are liable for an accident at your rental or you accidentally cause damage to your rental.
Also, an increasing number of landlords require that you have renters insurance. Most landlords include the requirement because they want to reduce liability, avoid payment for liability, appease insurance providers, and have peace of mind. Even if your landlord does not request it, you can still get the policy since it is affordable and you can get it easily.
Bottom Line…
No rules say you have to purchase rental insurance, and you can easily find a landlord who doesn’t make this policy a requirement. But by having a renters insurance policy, you will have peace of mind knowing that you are protected in the event of damage to your property or if someone was injured on the property.
For help finding the right renters insurance policy, contact All Things Insurance to speak to an experienced insurance agent.
FAQs
Loss of Personal Property: Without renters insurance, you'll have to pay out of pocket to replace your belongings if they're damaged, stolen, or destroyed in a covered event like a fire, burglary, or natural disaster.
What are 3 examples of things that could occur that renters insurance wouldn t cover? ›
Items not covered with renters insurance include:
- Personal property loss that exceeds the coverage limits on your renters insurance policy.
- Liability situations that exceed the limits on your policy.
- Damages caused to the structure of the building you are renting (which is covered by your landlord's homeowners policy).
Even if you think you don't own much, renters insurance may be a good idea. Could you afford to replace your stuff if it were stolen or damaged by a fire or windstorm? The personal property coverage in a renters insurance policy may help with those costs.
What are the 3 things renters insurance provides you with and what purpose does each of them have? ›
Renters insurance covers personal property, personal liability, medical payments and additional living expenses or loss of use, up to the limits of your policy. Learn more about what renters insurance covers and the types of renters insurance coverages.
Why is it bad to not have renters insurance? ›
Your Landlord Won't Cover Damages
For example, if there is a fire in your apartment, and you lose everything, your landlord will not pay to replace your belongings, even if the fire is not your fault. The same goes for many other kinds of emergencies that could befall a renter.
What is typically not covered by renters insurance? ›
Damage Caused by Floods, Earthquakes and Sinkholes
Flooding, earthquakes and sinkholes are all examples of natural disasters that are not covered by a typical renters insurance policy.
What does renters insurance not include? ›
What does renters insurance not cover? Renters insurance typically won't cover normal wear and tear, or damage or losses that occurred before you bought the policy.
Why do landlords want you to have renters insurance? ›
Unlike some other states, California landlords are allowed to require tenants to obtain and maintain renters insurance while they are under the terms of the lease. This is done in part to protect landlords from lawsuits in the event that damage to the property causes it to become uninhabitable.
Is it worth it to get renters insurance? ›
Renters insurance coverage is almost always worth it. It is much more affordable than other policies, including home or auto insurance, and provides valuable financial protection. Even if you can save enough money to cover unexpected loss, renters insurance may be worthwhile.
How important is renters insurance? ›
Renters insurance can help you repair or replace property after loss due to many types of damage or theft. It can also provide coverage for an accident at your residence. Policies usually have very affordable annual premiums. Note that your landlord's property insurance doesn't cover your belongings.
Typically, your renter's policy will not cover your hotel due to your air conditioner being out. A broken AC is not considered the loss of use of the dwelling (home) — they typically only pay for other accommodations when the entire dwelling is uninhabitable.
Can you borrow money from renters insurance? ›
Renters Insurance is designed to replace your personal property in the event of a covered loss subject to a deductible. There is no savings feature that would provide for any type of loan. The policy will provide cash for additional living expenses if you must leave your apartment due to a covered loss.
Does renters insurance cover refrigerator food loss? ›
Your renters insurance policy will cover food that is damaged or lost in your fridge, freezer, or kitchen due to certain specific causes—like fire, water from burst pipes, or certain power outages that are caused by direct damage to your property. Always keep in mind that every claim is unique.
What happens if you don't have renters insurance and there's a fire? ›
If you are renting a house that burns down, and you don't have insurance, nothing happens. You lose everything. That's why it is so important for tenants to have renter's insurance, and homeowners to have homeowners insurance.
How many people don t have renters insurance? ›
55 percent of U.S. renters, or 61 million people, currently have renter's insurance policies. This number could rise to more than 65 million within the next year. 75 percent of insured renters are required by their landlords to obtain renter's coverage.
Should landlord be named on renters insurance? ›
Your landlord shouldn't be listed on your renters insurance policy as an additional insured. Having an additional insured on your renters insurance means that you would be paying to cover them and their personal property too.
What are 5 different events that would cause losses that would be covered by renters insurance? ›
Why do you need renters insurance, you ask? Well, look no further...
- Your phone's stolen at a music festival. ...
- Your laptop's swiped while traveling. ...
- Your bike's stolen (even though you locked it) ...
- Your neighbors leave their faucet on, and it floods your apartment. ...
- Your plumbing leaks, damaging your stuff.
Renters insurance has three basic coverage components: personal possessions, liability, and additional living expenses.
What are the three different types of coverage in a typical renters insurance policy? ›
Typically, renters insurance provides four types of coverage: personal property coverage, renters liability insurance, guest medical expenses, and additional living expenses.
What two disasters are not covered by renters or homeowners insurance? ›
Homeowners, renters, and condominium insurance policies do not cover damage from natural disasters such as earthquakes, floods, and landslides.
