In the U.S., only a landlord can require a tenant to buy renters insurance, as states do not have the legal capacity to mandate coverage. However, many landlords in the state of Tennessee are starting to require renter's insurance as part of the lease agreement, particularly in cities like Murfreesboro, which is a part of the infamous Tornado Alley.
Since renters insurance is often optional for the tenant, the decision to purchase a policy is often based on the renter's budget. A 2008 study by the Insurance Information Institute reported that renters in Tennessee paid the 12th-highest premiums in the nation, or $195 per property, per year. However, the cost of a renters insurance policy is only a fraction of a homeowner's, which in the same year averaged $692 per year and was ranked 24th-highest in the country.
In Tennessee, the decision to require renters insurance is at the discretion of the landlord, but the decision to buy coverage should be your own. Factors to take into consideration include the worth of your personal belongings, as well as how easily your items can be replaced after a disaster. First, take a personal inventory of your apartment or rented property and assign a value to your possessions. A renters insurance policy will cover the value of your personal items minus any depreciation in value, but if you purchased the additional replacement coverage protection, the cost of new items is covered. Renters insurance will also pay for new, temporary housing and food if your apartment is destroyed, and can even pay for any legal costs if a person is injured on your property.
If your Tennessee landlord requires a renters insurance policy in your lease contract, chances are there will also be a minimum coverage limit, such as $100,000, which can increase how much you pay for your policy. If you sign the lease, you will have to show proof of insurance or you will be in violation of the landlord's contract. Most landlords in Tennessee require the additional insurance coverage to make up for any gaps in their property insurance, which only covers the apartment's physical structure. The good news is that you can move on to another apartment if you do not agree with the insurance stipulations in the lease, but it may be worthwhile to shop around for a rate before giving up on your dream rental. You can also check with your auto or life insurance provider to inquire about package discounts on renters insurance.
If you have only a few items in your home worth insuring, a floater policy may be your best bet. In the renters insurance industry, a floater policy provides additional coverage options for the possessions in your home that are excluded on your standard policy, such as certain types of jewelry, electronics or antiques. If your "floater" items are protected as part of your plan, your insurer will pay to replace these items at their valued cost, which can save you money in the end on your most prized possessions.