While we all know the importance for a homeowner to purchase a home insurance, few people stop to consider if renters need insurance. In fact, when it comes to protecting yourself and your belongings, renting does not mean you are off the hook. Yeah, your landlord’s insurance policy will prevent the house from damage and take responsibility for his major losses when disaster strikes. But note that it doesn’t provide coverage for you and your personal items.

More often than not, we prefer not to spend extra money on renter’s insurance since we don’t believe anything bad will happen to us or just because we don’t have expensive stuff. Just imagine the following scenarios to figure out whether or not renter’s insurance is a necessity for you.

1) One of your guests has broken his ankle at the party held in the home or apartment you rent. The worst thing is that his health insurance doesn’t cover all the expenses caused by co-pay, X-rays and medication. Thus, you will have to pay hundreds of dollars to make up for those costs.

2) You return home and just find the refrigerator, along with microwave oven, flat screen HDTV and couch have been stolen. It will cost you at least $2,000 to replace all those items.

3) In the event that a fire starts when you are cooking in the kitchen, you might also have to spend substantial bucks repairing or replacing utensils and cabinets.

You know, unexpected emergencies might come up at any time, and they may lead to severe consequences. If you cannot withstand the potential financial losses, it’s better to purchase a renter’s insurance.

What does renters insurance cover?

Basically, renter’s insurance isn’t expensive. However, it can provide full coverage for your personal items and yourself. But when you move from one apartment to another, you need to readjust your renter’s insurance policy. You should also notice that other people living in the same rental unit are not covered by your renter’s insurance. Besides, a standard insurance policy doesn’t protect animals. So, for those that aren’t included in your renter’s insurance policy, you will have to purchase other types of insurance.

In general, typical items inside the rental apartment like electronics, jewelry, clothes, books, sporting equipment and furniture are covered by a standard policy. As your property is insured, anything that is lost, stolen, damaged or destroyed will be repaired or replaced by the insurance company. You won’t need to pay a penny out of your own pocket.

Also, a number of perils such as fire, wind, lightning, smoke, vandalism and accidental water damage are included in a renter’s insurance coverage. But if you happen to live in an area where earthquake or flood is likely to occur frequently, you will need to get additional coverage, as a standard policy might not cover losses caused by these events.

Renter’s insurance policy covers liability as well. That means when someone get injured or their property get lost, stolen or damaged in the rental unit, you don’t need to take responsibility for that. The renter’s insurance liability coverage will pay for medical or other costs.