Do You Need Renters Insurance?

Whether you're looking to rent an apartment, townhome, or house, the topic of renters insurance is bound to come up sooner rather than later. Depending on your landlord and specific lease agreement, you may or may not be required to have coverage. Still, renters insurance can help pay to repair or replace your personal belongings after a disaster like a fire and help cover you against extreme lawsuit costs. So, it can be highly beneficial to get a policy, whether it's technically required or not.

Fortunately, a local independent insurance agent can help you find coverage no matter what. They'll get you matched to the right renters insurance policy when you need it. 

Here's a breakdown of whether and when renters insurance might be required.

Is Renters Insurance Required?

Renters insurance isn't legally required in any state. However, landlords may require you to purchase a renters insurance policy as part of your lease agreement. This is legal in most states, but if there isn't a contractual provision in your lease that states you must have renters insurance, then coverage isn't technically required. 

In these cases, it's up to your discretion whether you want to pay for a policy. However, it's generally beneficial to purchase renters insurance so that you can receive reimbursement if your personal property gets damaged or you're found liable for injuries or personal property damage to another person. 

How Do I Know If I Need Renters Insurance?

Before you can pick up the keys to your next rented home, you'll need to fill out paperwork, including a lease agreement. The leasing office manager might require you to have coverage already and provide your policy number or declarations page before you can sign this contract. 

But, in some cases, they may explain the property's requirements for renters insurance as you're signing the lease. Some landlords allow residents to opt to pay a monthly fee instead, in order to waive renters insurance if they don't get their own policy.

Where Are Landlords Not Allowed to Require Renters Insurance? 

Oklahoma is the only state where a landlord can't require tenants to purchase renters insurance. Oklahoma's decision is based on something called the Sutton Rule, which dictates that a tenant is co-insured under a landlord's policy. Thus, Oklahoma's housing laws dictate that a landlord cannot require renters insurance to avoid potentially duplicative coverage.

Note that Oklahoma is the only state to impose this rule, so if you live in another state and your landlord requires renters insurance, you'll have to comply. 

Other states have specific restrictions or rules surrounding renters insurance requirements:

• Virginia allows landlords to purchase renters insurance for the tenants, and they can even require the insurance premium to be paid upfront, similar to security deposits. However, these combined upfront payments cannot exceed two months’ rent.
• In Oregon, landlords can require tenants to purchase renters insurance, but the liability coverage requirement cannot exceed $100,000. 
• Section 8 subsidized housing recipients can't be required to purchase renters insurance unless renters insurance is required for all of a landlord's non-Section 8 tenants, as well. 

If you live in a rent-controlled or rent-stabilized apartment in Washington, D.C., New York, New Jersey, California, Maryland, or Oregon, check your local rules to find out if your landlord can require renters insurance for your rent-controlled unit, as rules will vary.

You can also enlist the help of a local independent insurance agent, not only to help you determine the rules for renters insurance in your area, but also to help you find the best coverage for your needs and budget. 

How Much Renters Insurance Is Required?

If your landlord requires tenants to get renters insurance, their lease agreements should state how much coverage is required in each area. Often, landlords require you to purchase at least $100,000 in liability coverage. However, other coverages, like personal property and additional living expenses, don't usually have specific required amounts. 

Of course, this can vary depending on your landlord and any regulations that might exist in your area. Check your lease to find out how much renters insurance you may be required to have.

Why Would I Need Renters Insurance If It's Not Required?

The main reason you might always want to purchase renters insurance is that without it, you're vulnerable to paying the full replacement cost for any damage or loss to your personal property. Moreover, you'll have no liability coverage if someone gets injured while visiting your home or if you cause damage or destruction to someone else's personal property, even if you're not at home. 

Here are some other reasons why you might want to have a renters insurance policy:

• It's inexpensive: The average cost of renters insurance in the U.S. is $148 per year. This can be considered, by many folks, to be a small price to pay, considering the alternative could potentially involve paying out of pocket to replace your personal property after a disaster like a fire or theft.
• It protects your belongings away from home: Another clear benefit of renters insurance is that it covers your personal property outside your home. For example, if some of your property gets stolen from your car while you're out running errands or someone pickpockets your cell phone while you're walking around the city, renters insurance can help pay for the replacement. However, coverage limits are often lower when the property isn't at your home.
• It protects against lawsuit costs: Renters insurance protects personal property as well as potential liabilities. If a guest gets injured at your home because they tripped over something you left on the floor, they could sue you. Without renters insurance, you could have to pay lawsuit expenses all on your own.
• It offers loss of use coverage: If there's a catastrophe like a fire that causes you to be displaced from your home for a while, renters insurance can help pay for temporary housing and additional living expenses. So, if you have to stay in a hotel while your unit is undergoing repairs, renters insurance can help reimburse you for these extra costs.
• Your landlord's policy doesn't cover your stuff: A landlord insurance policy doesn't include the protection a renters insurance policy does, which is why tenants need their own coverage. The landlord's policy won't cover your personal belongings or liability.

If you're still unsure whether you want to purchase a renters insurance policy, discuss the pros and cons with your independent insurance agent.

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How Can an Independent Insurance Agent Help You Get the Best Renters Insurance?

When shopping for renters insurance, an independent insurance agent can help you get matched to the right policy quickly. These agents can shop and compare policies from multiple local carriers for you. This means they can compare rates and help you get the policy that offers the overall best blend of coverage and cost. And down the road, your agent can help file claims for you and update your coverage as necessary.