Here’s What You Need to Know About Renters Insurance
What is Renters Insurance?
Generally speaking, renters insurance covers your personal belongings in case of theft or damage. A landlord’s insurance policy only covers the building itself, not the contents inside, so if you live in an apartment, it’s up to you to make sure your things are protected.
“Personal belongings” include everything you brought with you into the apartment: furniture, rugs, electronics, clothes, kitchenware, decorations, bed linens, appliances, etc.
The exact situations covered will vary from policy to policy, but typical coverages include:
Weather-related damages. E.g. fire, storms, hail, lightning, freezing, and weight of ice and snow.
Non-weather-related damages. E.g. theft, vandalism, vehicle crashes, and water damage from a burst pipe.
Renters insurance also includes:
Liability Coverage. This covers the cost of lawsuits due to injury or property damage caused by you or your family, as well as the cost of medical bills in case a visitor is injured on the property.
Additional Living Expenses. This covers the costs of food and accommodation should you have to move out due to damages.
Some policies offer other coverage options as well, such as:
Brand new item replacement, which replaces your old items with brand new versions.
Flood, hurricane, earthquake or volcano insurance.
Credit card coverage, for fraudulent charges.
Extended coverage for high-value items like jewelry, antiques, etc.
Theft extension, which also covers things you have in your vehicle, storage units, etc.
Why Don’t More People Have Renters Insurance?
According to a recent study by the Insurance Information Institute, 95% of homeowners had homeowners insurance and only 40% of renters had renters insurance.
So what’s the deal here?
Most people don’t buy renters insurance because they:
Think they’re already covered.
Think it’s too expensive.
Don’t think their stuff is worth enough to warrant insurance.
For the most part, these are myths. Let’s dispel them!
#1 — Renters are NOT covered by their landlord’s insurance policy. As already explained above, landlords’ insurance policies cover only the structure of the building, not what’s insidethem.
#2 — Many renters, especially millennials, assume that renters insurance is too expensive for them. While “expensive” is certainly a relative term, the fact is that renters insurance costs much less than most people believe.
For example, for $30,000 of coverage, for a rental unit just outside a major city, the average monthly cost is around $17. Of course costs will vary depending on where you live, your level of coverage and other factors, but it doesn’t have to be expensive.
Most companies will also offer you discounts: if you have another insurance policy with the company, if you haven’t filed a claim in a while, and/or if you have things like smoke detectors and burglar alarms installed.
#3 — It is easy to underestimate how much your belongings are worth. If you walk through every room in your place, adding up the replacement cost of every single item you own, you’ll see how quickly things add up. Use this Personal Property Cost Calculator to see for yourself.
Should You Get Renters Insurance?
Of course, as always, it’s up to you to weigh your options, personal preferences and the factors of your situation and make your own decision.
But in general, since you’re asking? Yes, you should get renters insurance.
Intense weather can spring up at any time, thieves are most certainly out there, and all it takes is one careless tenant in the building to spell disaster for a lifetime’s worth of possessions.
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