Simply put, tenants should have renters insurance because it provides peace of mind when the unexpected happens. It reduces the financial impact of unexpected and sudden events. Tenants pay for renters insurance. The good news is that renters insurance is inexpensive. The average monthly premium is $14 or $168/year.
A renters insurance policy covers the tenant’s personal belongings in cases of damage or theft. When purchasing a policy, tenants estimate the value of their personal belongings. The coverage amount will determine how much to compensate the tenant when their belongings become stolen or damaged in a covered event.
Renters insurance also provides liability protection in situations where a guest at the rental property becomes injured. For example, if the tenant’s friend trips over the laundry basket, then renters insurance may cover the friend’s medical expenses. In these unexpected cases, it is a good idea to have renters insurance.
If the rental unit becomes uninhabitable due to property damage, then renters insurance can cover the cost for temporary housing. For example, if a pipe bursts and the rental unit is flooded, then renters insurance may cover the cost of a hotel while the unit is being repaired.