The simple answer is… Yes! You need renter’s insurance.  Renter’s insurance is inexpensive (of course that depends on how much coverage you have) and will protect you from theft or loss of your stuff from a fire.

Everyone knows that you need car insurance, health insurance and homeowner’s insurance but according to a recent Rent.com survey, 60% of renters do not have a renter’s insurance policy. Younger renters were even less likely to be covered, with 72% under the age of 25 without a policy.  If you consider that most first-time renters are young and have little or no savings, that’s just crazy.

I understand the thought process of the young, first-time renter… “I’ll pay for insurance month after month, spending all of that money, and will never need it”  Well, that might be true, but ask anyone who has ever needed insurance, of any kind, and I’m sure they will tell you that they are thankful that they had it.  Loretta Worters, vice president of communications for the New York–based Insurance Information Institute, says that “A lot of consumers are under the misconception that their landlord’s policy will provide coverage for them, and that’s not the case,”

So what does renter’s insurance cover?

There are a number of coverages designed to protect you as a renter from the unexpected.  Here is a look at some of the things that are covered.[1]

• Personal Property — Allstate asks that if you are considering whether or not you need renter’s insurance, that you think about all of the stuff that you own… now put a dollar amount to all of that stuff.  That’s a crazy number isn’t it?

  According to Allstate.com, “A renter’s insurance policy offers you coverage for the theft, loss or destruction of your personal belongings in the event of a fire, storm or other covered peril. This can help you replace the items you use on a day-to-day basis, from your clothing to your appliances to your furniture—as well as your more expensive items. If you’re a die-hard jewelry collector or an audiophile with tens of thousands of dollars’ worth of pricey sound equipment, you can even take out extended coverage that provides you with higher limits, sometimes called floater insurance or Scheduled Personal Property coverage.”

  Sure, the detectable will increase when you add extra coverage but it will be worth it to make sure you have enough coverage to cover your really expensive stuff.  Allstate goes on to say that “Having a renters insurance policy can even cover your personal belongings when they’re not inside your home—like if you take your laptop with you on a trip and it is damaged or stolen.”

• Liability Coverage — Liability coverage comes standard with a renter’s insurance policy and it covers you if some yahoo decides to fall or get hurt some other way, while they are at your apartment, and then figures they see Judge Judy and sue you.  If this happens and you are found responsible for the accident, your renters insurance liability coverage can help pay for your legal expenses and their medical bills and other damages.

  Allstate’s pitch about the liability portion of renter’s insurance says that “Liability coverage can even pay for damages caused accidentally by you or your family members. For example, if your child accidentally throws a baseball through your neighbor’s living room window, your liability insurance plan could cover the damages.”

  …not a bad idea to make sure you have this type of coverage.

• Living Expenses — So what will you do if your apartment burns down, or declared uninhabitable because of a disaster?  Well, you can’t sell your stuff (since it was all destroyed in the fire) to get money… that’s where your renter’s insurance helps out.  With a renters insurance policy, you don’t have to worry, this coverage helps pay for temporary living expenses. “This can include things like hotel bills to restaurants to other living expenses you normally wouldn’t incur. With a renter’s insurance policy, you don’t have to worry that a damaged roof will force you to share a house with your in-laws. For that alone, it’s a priceless investment.”[2]

Most major companies offer renter’s insurance, and since you have to have insurance for your car, check with your auto insurance provider to see if you can get a deal if you bundle your auto and renter’s insurance together.

Remember, renter’s insurance is pretty cheap… and there’s a good chance that if you rent for any amount of time, you’re going to need it.