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Renters insurance, do I really need it?

Updated: Dec 26, 2018

Just like my grandpappy used to say, “renters Insurance...can live with it, shouldn’t live without it!” No he never really said that, but it would’ve been pretty smart advice if he had. We look at lots of stats, trends, and figures here at LIVV, and thought we’d share some advice about renters insurance that we never got when were coming up in the world.


What does renters insurance cover?

Each policy is a bit different, but typical renters insurance provides financial reimbursement to cover a tenant’s lost or damaged possessions as a result of natural disasters, fire, theft or vandalism - yes that includes your sweet fixie bike and fancy noise canceling headphones. It also covers a tenant’s liability in the event that one of your guests is injured on the premises. Whether the renters insurance or the landlord insurance pays for the costs associated with the injury will depend on the circumstances of the incident, the location on the premises where the injury occurs, and who is at fault. Either way, it’s a pretty good idea to have the coverage so you don’t end up paying out of your pocket if something does go unexpectedly wrong.


Do people actually get renters insurance?

A 2016 Insurance Information Institute poll conducted by ORC International found that only 41% of home renters had renters insurance. Compare that to 95% of homeowners with homeowners insurance. This is likely due to the shorter expected residency in a rental versus a home purchase, and the perception that insurance isn’t as important in these shorter arrangements. That doesn’t make the odds of escaping a loss any more real however. Loss incidences, theft, and tragedy don’t care whether you rent or own the home.


Can I afford renters insurance?

Although this paints with a broad brush, a generally accepted formula to use when deciding affordability of purchases in your household is ‘gross rent as a percentage of income’ or GRAPI. It basically says that if you spend greater than 30% of your income on rent, you are living at an unsustainable level. (Meaning you have to watch your purchases closely). Take everything with a grain of salt though, and remember that this is just a general way to govern major expenditures while renting. On the good side, renter’s insurance falls well below the concept of a ‘major expenditure’, with rates averaging around $15.75 a month. You’ll spend more than that on a lunch date for one!

Notice anything statistical about the Insurance Information Institute stats above? The highest ranking rental insurance premiums fall within hurricane-prone states on the Gulf Coast, or states in Tornado Alley – no surprise there. It’s a useful way to know what to expect when running down premium quotes.


More insurance info if you want more

Here is an awesome guide defining industry terms you will encounter, along with the different types of policies, and which may be right for you. It broaches topics like floaters, deductibles, and cash-value coverage. We also like this short video explaining what is and what is not covered under most policies.


Where can I buy renters insurance?

Being the app-geeks we are, we played with a few sites, and Coverhound has a smooth one that compares policies for you. Lemonade is another cool one to compare and buy from. We’re not affiliated with either, just throwing some options out there for you.



About LIVV

LIVV is the world's first AI powered apartment search assistant designed to help you find and rent the perfect apartment, condo, or home quickly and effortlessly. Tell LIVV your housing and lifestyle preferences, and it will deliver strong matches, help you stand out, and lease that perfect new home. Let your next apartment find you at LIVV.co


Author

Jim Logan - Research & Content Development Intern at LIVV

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LIVV is the world's first AI powered apartment search assistant that's making it easier than ever to find & rent your ideal apartment, home or condo. Using advanced artificial intelligence, LIVV is able to understand home seeker preferences & analyze housing inventory the same way a human agent would - providing smart matches instantly.

 

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