Renter’s insurance – common questions and misperceptions

In today’s tough economic climate, the National Association of Insurance Commissioners (NAIC) notes that many former homeowners may now be renters, either due to their own choice to downsize or due to a home foreclosure. In the light of this, NAIC offers an alert about renter’s insurance, which discusses the importance of renters’ insurance and dispels some of the most common misperceptions that people have about this type of insurance.

  • “Renter’s insurance is too expensive, and I already have enough bills to pay.” The average renter’s insurance policy costs between $15 and $30 per month. Replacing all of your possessions or being liable for an accident on your premises will cost much more.
  • “I don’t have that many valuables; renter’s insurance isn’t worth the cost.” Renter’s insurance policies can cover everything from electronics to clothing to household appliances. Even a minimal number of items could add up to thousands of dollars’ worth of merchandise, which can all be covered in a basic policy.
  • “My landlord has insurance, so I’m already protected.” Your landlord has insurance for structural damage to the building, and might even be protected against damage caused by tenants. However, this coverage does not extend to your personal property, nor does it protect you from being liable for damage you might cause to the building inadvertently (e.g., a kitchen fire or a plumbing mishap).

The alert also includes other common questions and answers related to renter’s insurance. If you have questions about whether or not you need renter’s insurance, how much coverage you need, or what it will or will not cover, your independent agent is also a good source of information.

Whether you are a homeowner or a renter, the Insurance Information Institute offers a free downloadable home inventory software This software will help you create a room-by-room inventory of your personal possessions. Having an up-to-date home inventory will help you:

  • Purchase enough insurance to replace the things you own
  • Get your insurance claims settled faster
  • Substantiate losses for your income tax return