Why Renter’s Insurance is No Joke

Most of us know that insurance is necessary for owning a vehicle. If there is an accident, then your insurance company will work with you to obtain a replacement vehicle. However, have you given thought to what would happen if there was a fire, flood, or burglary in your home? If you don’t have renter’s insurance, you will most likely be on the hook to replace your items that were destroyed or stolen. While it may seem like a policy that you don’t think you will ever need, with most plans starting at a few dollars per month, it may be a wise investment. Especially since renter’s insurance doesn’t just cover your rental, but also all your belongings! With nearly all homeowners reporting that they have a homeowner’s insurance policy, renters may want to investigate purchasing their own renter’s insurance policy.

What Does Renters Insurance Cover?

First, let’s start with what exactly is meant by Renter’s Insurance. According to the rental specialists over at Trulia, renter’s insurance applies to your personal property located within your home. If something should happen, such as a break in where some of your property has been stolen, your policy will cover the costs associated with replacing your items that were either stolen or damaged. Additionally, depending on the renter’s insurance policy you select, it could even cover damage that is caused by fire, natural disasters, and even vandalism.

You may be thinking to yourself, “I don’t really have what some may consider valuables and I live in a safe neighborhood. Do I really need to purchase a renter’s insurance policy?” While all of those things could be true, renters insurance also includes liability coverage, which covers the cost of care, as well as any legal proceedings that may occur while in your home. In some situations, you may have to pay a higher premium if you happen to own a dog that falls under the breed specific legislation in your town.

What to Consider When Purchasing a Renters Insurance Policy

With the average cost of a renter’s insurance policy of under $200 annually, it may seem like a deal that is too true to be good, with good reason, as the cost for replacing or repairing any of your belongings that should become damaged while you are covered by your policy far outweighs the cost of the policy. However, as with car insurance, paying a little each month can be quite helpful should anything happen to you, your belongings, or anyone in your home who may become injured. There are a few things that you should consider when selecting the best renter’s insurance policy to fit your needs.

• What is the value of my belongings?

Imagine if you woke up and found out that you had to replace all your belongings. How much do you think that would cost? Do you have enough in savings to repurchase things in your home that may become damaged or taken during a burglary? Chances are, it would take a long time to save up to replace your cherished belongings. It is estimated that an average renter has around $30,000 worth of belongings, which can be covered and replaced easier if you purchased a renter’s insurance policy. You may have more or less, which makes logging an inventory of your belongings an essential aspect when selecting a renter’s insurance policy.

• How can I lower my renters insurance premium?

Although most renter’s insurance policies are under $20 per month, there are several factors that can influence the amount you pay each month or on an annual basis. For example, the neighborhood in which you live can either raise or lower your premium, depending on the level of crime that is present in the area. Likewise, the value of your items can also have an impact on your premium. However, if you have a front door equipped with a deadbolt lock, fire extinguishers, as well as the presence of working smoke detectors in your home can help to bring down your premium. Raising your deductible can also save you money, but be careful, as you will most likely have to pay more in the long run should anything happen to your belongings.

Conclusion

Purchasing renter’s insurance may not have crossed your mind but based on the cost to replace all your belongings should a fire, flood, or burglary occur, the cost of such a policy pales in comparison when looking at the price tags attached to each. Take a minute to look around your home. Can you afford to replace your items should something happen to them? What if your friend comes over and gets injured while on your property? Both scenarios could be covered by a renter’s insurance policy. For the cost of a few cups of coffee a month, you could sleep well knowing that you and your belongings are covered.

References

Brenoff, A. (2012). Is Renters Insurance Worth It? Huffington Post. Retrieved from https://www.huffingtonpost.com/entry/is-renters-insurance-worth-it_us_5aa19a90e4b0ea12e965663a

Koretzky, M. (2011, July 4). 6 Myths about Renter’s Insurance and How to Save. Retrieved from https://www.moneytalksnews.com/5-myths-renters-insurance/

McGrath, M. (2014). Renting An Apartment? This Mistake Could Cost You $5,000 Or More. Forbes. Retrieved from https://www.forbes.com/sites/maggiemcgrath/2014/04/08/renting-an-apartment-this-mistake-could-cost-you-5000-or-more/#46fe147947cb

Trulia. (2018, March 13). What Is Renters Insurance and What Does It Cover? Retrieved from https://www.trulia.com/guides/what-is-renters-insurance/