Your landlord is not responsible when other people get hurt in your apartment, which is why renters insurance is so important. You’re legally responsible as a tenant for personal property damage and bodily injuries that guests suffer at your residence. You’ll have to pay for legal fees, plus damages if that person files and wins a lawsuit against you. Not being prepared for that can wipe you out financially.
Legal Defense Costs
No tenant wants to end up in the middle of a liability lawsuit. If you don’t hire legal counsel as soon as you’re served with a legal complaint, fighting a court battle is harder. However, as a tenant you may not be financially prepared, and have no choice but to try to defend yourself without an attorney, because you don’t have the money to hire one. Many legal services available for free or low cost don’t include lawsuits for personal liability. Your only other option when you don’t have money is to prepare in advance with renters insurance. That’s part of what your premium payments are paying for: future legal defense.
Notify your insurance company as soon as you’re served with court papers, and the insurance company will provide the legal defense and support that you need. The company can decide to settle the case instead of going to trial. You won’t get much of a say in their legal strategy if you rely on their legal defense.
Some guests are happy if you pay medical bills they owe as a result of injuries. Either they don’t have enough insurance to cover it all, or they don’t have any, and need you to pay their medical bills. Renters insurance covers that, too. For example, if your co-worker while visiting you slips and falls inside your apartment, and suffers back injuries, you can file a claim with your insurance company to pay their medical bills. There are limits to the amount that your renters insurance company will pay out. When shopping around for a policy, ask questions about the amount your policy includes for medical payments. Some companies will offer more in medical payments for the same rate.
The insurance company will not pay a penny higher than the liability coverage you’ve paid for. Some renters make the mistake of choosing renters insurance that offer a very low premium payment, and low liability coverage to match. If you’re the type of person that has a lot of people visiting your apartment, you’ll need higher liability coverage than most. It’s worth paying a higher monthly premium in that case. If you’re on the other end of the spectrum, you won’t need much liability coverage.
Very few tenants make enough money to save for liability lawsuits that can amount to more than $100,000 in judgments. Renters insurance is one of a few options you have to access that kind of money, and the attorneys you need, in a worst case scenario.