by Katerina Nikolas

Created on: January 13, 2010   Last Updated: February 27, 2010

Renters come from all walks of life. Families with children, students taking their first step away from the parental home and city dwellers. One thing they all have in common is the need to have renters insurance in place to protect against the unexpected. Many people have the mistaken assumption that the landlord’s insurance covers them but it doesn’t.

Your landlord's property insurance will cover the actual building you rent in, but it won't cover your belongings or liabilities, so ensure that you have your own renter's insurance in place, or you may well regret it in financial terms.

So why should you have renters insurance? In the first instance it covers your personal liability. If anyone has an accident within your home then you could end up being liable for their medical expenses. Your insurance will take care of that. If the injured party decides to take legal action against you then your insurance will take care of any legal costs you incur. Both of these are things which you may not have considered until it happens.

Renter's insurance also covers you against a myriad of things which could happen to damage your home or your possessions. Never underestimate the value of the possessions you have, which most likely include computers, furniture and clothes. If you had to replace them this would be a costly exercise. Most policies cover fire and smoke damage, and water damage, but also offer protection against the most unlikely sounding events. Things such as ice damage and lightning will be outlined on the policy.

Most insurance policies don’t cover floods so if you live in an area liable to flood speak to the insurance company. If fire or water damage made your rented home uninhabitable, you could be left temporarily homeless. One of the key features of rental insurance is that it will cover the costs of you living elsewhere whilst the rented property is made habitable again.

Theft is of course the natural worry, and renter's insurance covers your possessions both inside and outside the home. It is likely that the insurance premiums will be lowered if you take simple precautions to make your home more burglar proof, such as dead bolt locks and a burglar alarm. More expensive items such as jewelry can also be added to your policy for additional peace of mind, though you will need to itemize these items separately for additional cover.

It makes good financial sense to have renter's insurance, without needing to go to the expense of full property insurance. It spares you any worries about personal liability or temporary homelessness, whilst ensuring that your personal possessions are safely insured should anything happen. It is a small price to pay for the security it offers.

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