Why is Renter's Important?
Renter's insurance not only protects the policyholder's personal items it will also provide help with temporary housing in the event of a fire and liability protection (i.e. medical expenses for guests who may become injured in the rental unit). The policy protects the policyholder. In a roommate situation each roommate must either have separate coverage or both of them must be named on the policy for complete coverage.
Many people think that the landlord's insurance will cover them, but that is not usually the case. If for example the tenant causes a fire in the rental unit from cooking, smoking, burning candles, etc. the landlord's insurance provider will pay for the necessary repairs to the rental unit and any other units that are damaged, then the company will sue the tenant to recover their expenses as a result of the tenant's negligence in starting the fire. Without renter's insurance a tenant could be financially ruined.
Requiring Renter's Insurance
In many cases insurance companies will charge a landlord more if they their residents don't have renter's insurance. As a result more and more landlords are requiring renters to have renter's insurance or be in breach of their rental agreement.