Renters Insurance 101: 6 Reasons Why You Should Have It

By the Mercury Team

Do you rent your home? If so, you’re not alone. According to the National Multifamily Housing Council, 44 million households are renters. However, many people are unprotected since 59% of renters don’t have insurance. This means that if there’s a fire or other unforeseen event, renters could lose everything, and many wouldn’t have the means to replace these items. There’s good news, though. Renters insurance is very affordable and can provide protection in the event of a loss or liability claim.

If you’re one of the tens of millions of Americans who don’t have renters insurance, take time to learn more about this coverage and why you should purchase a policy.

What Is Renters Insurance?

Renters insurance is a policy that offers financial protection from covered losses when you’re living in a rented property, such as an apartment, house, or condo. Some of these covered losses may include:

• Fire and smoke
• Theft and vandalism
• Lightning
• Water damage (e.g., burst pipe)
• Falling objects
• Weight of ice, snow, or sleet
• Mold
• Explosions

However, renters insurance doesn’t cover damage from floods or earthquakes. You must purchase separate insurance policies if you want coverage from these perils.

Is Renters Insurance Required?

No, renters insurance is not required by law. However, landlords and property management companies can legally require tenants to carry a renters policy as part of the leasing agreement. The reason is that landlords want you to be insured to help lower their liability and prevent possible disputes — e.g., if your belongings are damaged while on their property.

What Does Renters Insurance Cover?

A standard renters insurance policy may offer four kinds of coverage that help protect you, your belongings, your guests, and your living arrangements following a covered loss. Here’s how each type of coverage works:

Personal Property

Personal property coverage provides financial reimbursement to cover your lost or damaged belongings in the event of a covered loss, such as fire, theft, or water damage. Examples of these belongings include clothing, furniture, appliances, and electronics. If you have highly valuable items — e.g., jewelry, vintage instruments, antiques, fine art, etc. — you may want additional personal property coverage to protect these valuables.

Liability Protection

Liability protection provides financial protection if you cause bodily injury or property damage to others due to a covered incident — either on the rental property or elsewhere. For example, suppose your child accidentally breaks your neighbor’s window, or your dog bites someone at a nearby park. In that case, you might avoid paying out of pocket for these incidents — up to your coverage limits.

Guest Medical Protection

Guest medical protection pays medical bills for your guests who accidentally injure themselves while on your rented property. For example, if your guest trips and falls while walking down your stairs, guest medical protection can help cover their medical expenses.

Additional Living Expenses

Additional living expenses help reimburse you for the costs you incur for maintaining a standard of living if your home becomes uninhabitable due to a covered loss. These expenses include hotel stays, meals, storage unit rentals, laundry, and more. Be sure to keep your receipts for your insurance adjuster.

6 Reasons Why You Should Have Renters Insurance

Here are some of the reasons why you should have renters insurance:

Landlord Insurance Won’t Cover You

A common misconception is that renters insurance is unnecessary if your landlord already has insurance for the property. Unfortunately, your landlord’s insurance policy will not cover any of your personal belongings in the event of a loss, and it won’t provide liability protection if a lawsuit is brought against you. Although you may not be responsible for repairing the rental property in the event of a covered loss, there’s always a chance your possessions and valuables will need to be replaced if they’re damaged or stolen.

It’s Fairly Affordable

According to NerdWallet, the national average for renters insurance in 2023 is $179 per year or $15 per month. Your actual cost will depend on several factors, such as the amount of coverage you need, the type of coverage you choose, the amount of your deductible, and where you live. However, renters insurance is still relatively affordable in the grand scheme of things. If you choose Mercury for renters insurance, you can get coverage for as little as $11 a month.

You Might Own More Valuables Than You Think

One reason you may not get renters insurance is that you don’t believe you have many valuables. But if you put together an inventory of all your belongings, you might discover that you own several valuables that are worth a lot of money — e.g., computers, shoes, furniture, etc. Ultimately, replacing these items by yourself may cost much more than leveraging renters insurance.

It Covers Your Belongings Away From Home

Renters insurance doesn’t protect your belongings when you’re at home. It also provides coverage when you travel or somewhere else other than your rental property. For example, if you travel on vacation and your laptop gets stolen, your renter insurance may reimburse you for this loss.

It Can Protect Your Finances

Let’s say you’re saving money for a down payment on a house or a new car. Then, while taking your dog on a walk, they bite a neighbor and sue you for bodily injury. A lawsuit can easily wipe out everything you saved up for, leaving you in a deep hole. Renter insurance can cover the legal and medical bills for the injured party up to your coverage limit, helping you not drain your entire savings.

You Can’t Control Your Neighbors

While you may do everything in your power to keep your rental property safe and intact, you can’t control what your neighbors do. For example, your upstairs neighbor may have left the oven on, and then you come home to a building on fire with all your belongings destroyed. Without renters insurance, you wouldn’t get reimbursed for anything. Play it safe and purchase a renters insurance policy to protect yourself from the unexpected.

How to File a Renters Insurance Claim

When you purchase renters insurance through Mercury, you can file a claim 24 hours, seven days a week. Submit a claim online or call our claims hotline at (800) 503-3724 to get started.

Conclusion

Renters insurance provides financial security to cover an extensive number of unexpected and unforeseen events and can be readily obtained for an affordable cost. Speak to a Mercury agent to learn more about your coverage options and eligible discounts.

Contact us for a fast, free quote today!