Unless you live with your parents or other family members deep into adulthood, you will likely have to rent an apartment or a similar living accommodation as the first place you call home after growing up.
Renting is different from buying for many obvious reasons, but that doesn’t mean there aren’t still many confusing aspects of the experience. Landlord rights and renter responsibilities are mixed and matched, and sometimes it requires legal help to figure out who is liable for what aspect of the relationship.
Your landlord will protect you from structural damage to the property with their own insurance policy, but they won’t necessarily protect you from the dangers of a burglar stealing your prized possessions in the middle of the night.
This means that it is beneficial for both parties for you to purchase some renters insurance. You’re probably thinking, “I shouldn’t have to worry about the cost of renters insurance on a property that I don’t even own.”
Still, you have to have car insurance on a vehicle that you are only leasing or renting, so why wouldn’t the same thing apply to your apartment? If you are using something as your own, you need to have an insurance policy on that item.
We will cover the specifics behind whether a landlord can legally require you as a tenant to buy renters insurance. We will also talk about some of the other overlooked aspects of the renting experience and how you can be protected living on a property that you don’t own.
What is renters' insurance?
Typically, renters' insurance is broken down into three categories — personal property, liability, and additional living expenses. All three categories are commonly included in most policies, though it’s crucial to understand what they all offer.
The personal property portion of your policy will cover the cost to repair or replace your belongings if they are damaged or stolen. Your insurance company will offer a limit on the amount of coverage they will offer, so be sure to check with your agent to find out your limit.
If your damages or theft exceed your coverage limit, you will not be compensated for your belongings. This could include big-ticket items such as electronics and furniture.
Liability coverage protects you if you accidentally damage someone else’s property or if you are found liable for another person's injuries. This coverage can help cover repairs or medical costs. Liability coverage has a coverage limit, just as personal property, so be sure you’re aware of this by checking with your agent to go over your policy.
Additional living expenses is an extremely helpful portion of your renters' insurance policy. With this category, you will be covered for expenses such as hotel stays if your rental becomes damaged or uninhabitable.
The limitations with this portion of your policy are damage to the structure itself. This could include major structural damage from weather such as earthquakes, sinkholes, floods, and landslides. In this instance, it will be your landlord’s responsibility to repair the structure since they own the building.
Another important factor to consider is whether you have a roommate. Renters insurance won’t cover your roommate's belongings if they are not on your policy. This means your roommate should either obtain their own policy or split the cost of shared coverage.
It will be up to you to determine how much renters' insurance you will need. Begin by assessing all your assets to determine their value. Assets can include all manner of belongings such as clothing, jewelry, electronics, and any other items you deem valuable.
Why would a tenant need renters' insurance?
We’ve already referenced this a little in the introduction, but part of the upside of renting instead of owning an apartment is that you aren’t responsible for many of the fixes and the upkeep that people who live in houses have to think about often.
Landlords are required to make sure that the building is up to health and safety codes, and they are financially liable for anything that breaks or goes awry while their tenant is living there. Landlords worry about things like heat, water, infestations, and other similar aspects of the accommodations.
Landlords are obligated to handle things that are out of the tenant’s control, so does this mean they also need to concern themselves with a break-in where a person’s TV and Nintendo consoles are stolen?
The quick answer is no, a landlord is not responsible for the stolen items that were taken from an apartment. This is where renters' insurance comes into the picture. With this type of policy, the holder can file a claim with their agent and get their stuff replaced or compensated for without the landlord having to hassle with it.
That last sentence is key in answering our main question. There are many basic tenant agreements that occur between renters and their landlords to prevent arguments and headaches down the road. Requiring a tenant to take out renters' insurance is one of these important topics.
It should not be the responsibility of a landlord to think about whether the people they are renting out the apartment lock their doors at night or put their stuff inside their apartment when it is delivered instead of leaving it out on the mat for days to collect dust.
Many tenants will argue that a break-in has happened because of a faulty lock or another slight that the landlord forgot to mention, and it creates a different logistical nightmare for both people.
Landlords are definitely responsible for any destruction of property or criminal activity that happens on the apartment grounds that could have been avoided with proper maintenance and repairs. If the apartment complex does not have locks, this is something that a renters insurance policy will not cover, and the landlord will have to reimburse the tenant for damages.
A lot of this seems like it should be common sense, but it can get messy when people think they have a right to something that they don’t. This principle applies to all people who are part of the renting experience.
Can a renters insurance company raise your rates?
When you have a DUI on your driving record, you have a difficult time finding an auto insurance policy that will give you any sort of coverage while driving because you are a major risk to the insurer.
When you have had several heart attacks and seek out a life insurance policy, you may not get access to any sort of policy because the company is at a huge risk of delivering a payout in the short term.
The same principles apply to taking out a renters insurance policy. The insurer wants to make sure that you are not a huge risk to their finances. After all, they are trying to make a profit, and they will look at your renting background to see what you could do to avoid future damages they have to pay for.
If you rented an apartment in a crime-ridden neighborhood, both the landlord and the renters insurance company know this. The landlord is going to encourage a strong renters insurance policy to make sure you are protected from theft in the area.
If you leave your windows open and someone climbs into your apartment and takes your jewelry, your rates are going to skyrocket because you chose a bad area to live in. You also didn’t take precautions to prevent the criminal activity.
If you do your part to keep your apartment safe, you can rest assured that there is affordable renters' insurance out there for you and your family. Many people who rent worry that this type of insurance will increase their financial burden, but ignoring renters' insurance will affect your wallet in a disastrous way.
Ask your landlord whether they have a specific renters insurance in mind that other tenants have used in the past. Learning from others is always the best way to get the deal that is right for you.
Shawn Laib writes and researches for the legal advice site, Clearsurance.com. He enjoys helping people understand their rights in the legal space.
