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If you’re a homeowner, chances are you have homeowners insurance. In fact, it’s mandatory if you have a mortgage, as your lender will require it. But what about if you rent an apartment or condo? Can you get insurance to cover your belongings the same way you can with homeowners insurance? The answer is yes, and it’s likely cheaper than you think.
What Is Renters Insurance?
Simply put, renters insurance is a financial safety net to protect your property and liability. Functionally, it’s very similar to homeowners insurance. It covers your personal belongings such as furniture, electronics, jewelry, etc. as well as providing liability protection in case someone is injured while in your rental unit. Some renters insurance policies will even provide coverage if you’re temporarily displaced from your home by a disaster, paying for hotel stays and restaurant meals while you wait for your unit to become livable again. You may also be covered for medical payments to others should they be hurt while on your property, regardless of who is at fault.
Is Renters Insurance Mandatory in Arizona?
By the letter of the law, renters insurance is not compulsory in Arizona, nor is it legally required in most places in the US. However, many landlords include a clause in the lease that requires prospective tenants to purchase renters insurance. This is meant to protect the landlord from liability or damages caused by tenants.
When it comes to landlords and renters insurance, there’s also what’s known as “additional interest” or “interested party.” This means that the landlord gets notified whenever there’s a major change to your renters insurance policy (such as canceling it or failing to renew). This doesn’t afford the landlord any coverage, but it does keep them informed about the tenant’s insurance status.
When You’re Not Covered
A common misconception some renters have is that the landlord’s insurance will cover them in case of something like a fire or flood. Unfortunately, this is not the case. While a landlord’s insurance policy covers the land and the structure of the building, and might even cover the appliances and fixtures that came with the rental unit, it will do nothing to cover your personal belongings.
Similarly, a roommate’s renters insurance policy will not cover your belongings or legal liability unless you are both listed on the policy. If you are living with roommates, it’s best to each have your own policy, so there are no gaps or misunderstandings when it comes to your coverage.
Another area where you may not be covered is in the case of an earthquake or flood. Like homeowners insurance, renters insurance doesn’t cover this type of damage by default, so you may need to add an additional rider or endorsement.
Is Renters Insurance Expensive?
But can you afford your own renters insurance policy? That’s the good news: you probably can. According to Ross Martin at The Zebra, renters insurance is not only cheap at $157 annually, but also $27 a year cheaper than elsewhere in the United States. That’s less than the cost of a few trips to Starbucks every month. You might get even cheaper insurance, depending on what company you choose: American Family insurance, for example, charges about $121 a year, while State Farm offers renters insurance for an annual premium of $126.
Consequences of Not Having Renters Insurance
Besides its affordability, there are some great reasons to have renters insurance:
- Your belongings are covered in case of fire, burglary, or other natural disaster.
- You’re not on the hook for medical bills should someone else get injured while in your rental unit.
- You don’t have to pay out of pocket for room and board if your rental unit suddenly and temporarily becomes uninhabitable.
- If a renters insurance policy was in your lease and you don’t have coverage, you could be rightfully evicted by the landlord.
Finding Cheap Renters Insurance in Arizona
Arizona renters insurance may be cheap, but you can still save even more by employing a few time-honored strategies:
- Shop around and compare quotes using free online comparison tools. This lets you find the coverage you need at a price that works for you.
- If you own a car, bundle your auto and renters insurance together for a discount, just as you would with homeowner’s insurance.
- If you can afford to pay a little bit more out of pocket in case of an accident, increase your deductible. This will bring your premium down in the meantime.
- Don’t be afraid to ask your insurance company about discounts. Your average insurer has literally dozens of discounts available for a variety of criteria.
Finally, don’t forget to review your coverage annually as your life circumstances change. Perhaps you need more coverage than you did, or perhaps you’re paying for coverage you no longer have any use for. Regardless, it pays (literally) to review your policy every year and see where you stand.
