Apartment hunters know they have to account for rent and utilities with every lease, but that's not the only thing a budget must cover. It's not uncommon for landlords to demand anyone they're offering a room to show proof of renter's insurance. Ultimately, having that insurance is a bonus for both parties. However, if the renter says no, the landlord has a right to say no to the lease.
Renters Content Insurance
Although a responsible landlord insures the rental property's structure, that insurance doesn't cover tenants' belongings. If you lose a lot of your stuff in a fire or even a break-in, the landlord's insurance is not an answer. You'll have to turn to your own insurance to replace any personal property. Let's say there's storm damage that takes out some of the property and some of your possessions in one foul swoop. The landlord's deal will fix the damage, but it won't replace your possessions. Some policies also cover living expenses if the damage is so bad the tenants have to pack up and move.
Your lease may not stop at just basic insurance. It may insist you carry liability in addition to property insurance. Liability insurance protects you if someone is injured in your home. Whether it's due to your negligence, or just something the guest can blame on you, liability is more about covering you than the landlord.
Insurance and Your Lease
If renters insurance is a condition of your lease, failure to get it is a breach of your contract. If the landlord finds out you only said you got it, he can evict you. The lease may insist you carry a minimum amount of coverage, and you may need to name the landlord or property manager as an additional insured on your policy.
Reasons for Requiring Renters Insurance
Landlords like renters to carry insurance because it means they aren't carrying the whole weight of liability. Having the tenant's share some of the load lowers the landlords' own insurance premiums. It's also appealing to them because, should someone get injured on something you were responsible for, the landlord won't get sued -- you will.
Renters Insurance Cost
The premium depends mostly on how much content and liability coverage you want. Your deductible is another factor. Just like auto and health insurance, a high deductible may reduce the monthly premium. However, renters insurance is generally inexpensive. A high deductible may save you just a few dollars each month.
Daria Kelly Uhlig began writing professionally for websites in 2008. She is a licensed real-estate agent who specializes in resort real estate rentals in Ocean City, Md. Her real estate, business and finance articles have appeared on a number of sites, including Motley Fool, The Nest and more. Uhlig holds an associate degree in communications from Centenary College.