Do Renters Need Homeowners Insurance? Understanding Protection

Homeowners need homeowners insurance – but what about renters? Because renters don’t own a home, they might assume they don’t need homeowners insurance. However, even renters have belongings to protect and liability risks to manage. Renters, like homeowners, can benefit from insurance coverage.

Renters vs. Homeowners Insurance

There are different types of homeowners insurance policies, and they are typically standardized as HO1, HO2, HO3 and so on. One of these standardized homeowners policies, HO4, actually refers to renters insurance. You may see these terms when you are shopping for insurance or on your policy documents.

Despite the somewhat confusing terms, renters insurance is different from true homeowners insurance policies designed for people who own their home. Homeowners insurance typically provides coverage for the building structure as well as personal belongings, while renters insurance covers the personal belongings but not the building structure. Both policies can also provide coverage for liability and living expenses.

Many homeowners are required to maintain homeowners insurance under the terms of their mortgage. Similarly, many renters are required to maintain renters insurance under the terms of their lease. If your lease makes renters insurance mandatory and you don’t purchase coverage, your landlord may charge you a fee, and you could end up paying more than you would have if you’d purchased coverage on your own.

The Importance of Renters Insurance

Even if your lease does not make renters insurance mandatory, you should seriously consider purchasing it.

Your landlord should have landlord’s insurance, but this coverage will not protect your personal belongings. Imagine there’s a fire. The landlord’s insurance policy will cover the damage to the apartment building or house. It will not cover the cost of replacing your belongings, however, or the cost of finding somewhere else to stay temporarily. For that, you need renters insurance.

Renters often have many more possessions than they realize. Add up all of your furniture, kitchenware, electronic, clothes, games, books, art, knickknacks, jewelry and other belongings. You’ve invested a lot in these items over the years. If you lost everything in a fire, you’d probably have a hard time replacing all of it on your own. This is one reason why renters insurance is important.

But renters insurance doesn’t just provide coverage for fires. Other perils, including burglary, windstorms and falling objects, are also typically covered. Your policy may even provide coverage for items that are stolen outside of your home. See your policy for a full list of covered perils.

Renters insurance can also provide liability protection. If a guest is injured in your apartment, for example, this liability coverage can kick in. Because animal bites are a common cause of lawsuits, liability protection is especially important for renters with pets.

The Cost of Renters Insurance

Renters insurance policies tend to be very affordable, with many of them costing less than $20 per month. How much you pay will depend on several factors, including where you live and what policy limits you need.    

Want to find out how affordable renters insurance can be? Request a renters insurance quote.


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