This post was brought to you by RENTCafé.
If you’re one of over 100 million people in the U.S. who rent an apartment or a house, the concept of “renters insurance” shouldn’t be foreign to you. A renter’s policy is going to cover your personal possessions if they’re stolen or lost in a fire, or other unfortunate events. In some cases, it can pay for you to stay in a hotel if you are displaced by a fire or other natural disaster and can include liability coverage in case someone is injured in your home.
Unlike a homeowner’s policy that covers both structure and contents, renter’s insurance covers just the contents of your home and for that reason, it’s a lot cheaper. Conversely, the owner or landlord has an insurance policy that covers the building but doesn’t protect the tenant’s contents. So unless you have a pile of cash ready to replace all your stuff, renters’ insurance should be a no-brainer. Unfortunately for most, it’s not. Here are a few things to consider before deciding whether or not renters insurance is for you, courtesy of rental website RENTCafé.
What’s Your Excuse?
A survey commissioned by a major insurance company found that 59% of adults under 30 who rent – roughly 34 million people – don’t have renter’s insurance coverage. Of those nearly half didn’t think they needed it! Of the rest, approximately a third thought it was too expensive and a quarter simply had not gotten around to buying it. Given that 8 in 10 of those surveyed said they’d risk losing $5,000 or more in the event of a fire or break-in and given how simple it is to purchase a policy, you would think that purchasing renters’ insurance would be at the top of anyone’s to-do list before moving into an apartment.
In addition, according to Independent Insurance Agents & Brokers of America, you can purchase $30,000 worth of content insurance and $100,000 worth of liability coverage for about $12 per month. Considering most people pay more than $1,100 a month for an apartment in the U.S., renters’ insurance amounts to little more than 1% of one’s rent!
Dispelling the Myths
A Resident Shield story identified three myths associated with renter’s insurance. (We also heard a fourth about coverage being too expensive, but we dispelled that myth earlier.) Let’s have a look at these three.
Myth #1: I don’t own many valuable things
A common reason most avoid purchasing renters’ insurance is that they don’t think their belongings are worth the coverage. Seriously? Sit down and add it up and don’t forget the couch you’re sitting on while you do this. For just about everyone, there’s a bed and dresser, clothing, a television or two, a computer, a kitchen table and small appliances, and that’s just for starters. Since every place is susceptible to all sorts of damages, be it fire, theft or simply vandalism, most experts agree that there isn’t any conceivable scenario in which a tenant should go without insurance.
Myth #2: Rental insurance is limited to personal possessions
Renters’ policies can and should include liability insurance, which in many cases covers up to $100,000 against common claims, such as if your bathtub overflows and water seeps into the apartment below, damaging your neighbor’s stuff. Do you have a dog? If so, you can select a liability provision for dog bites.
Liability coverage also protects you if a guest is injured while at your residence in order to cover the medical expenses resulting from the accident. Also, consider what you would do if you were forced to move out temporarily. Policies can reimburse you for your additional living expenses.
Myth #3: I’m living in a rental so I am covered by the landlord’s insurance policy
This is one of the most common misconceptions of renters. As mentioned above, a building owner’s insurance covers the building’s structure but it doesn’t cover the replacement of the contents of an apartment, which leaves renters’ personal possessions at risk in the event of a fire or break-in. Also, even if a landlord owns the appliances, the landlord is not responsible for damages if the refrigerator breaks down and all of your food is spoiled. A renters’ insurance policy can cover those unexpected events.
Renters’ Insurance Can Truly Save the Day!
Occasionally, a landlord may require the tenant to purchase renters’ insurance, but regardless of whether they do or don’t, you need to consider what you would do if any of the following occurred.
Personal Property Loss: Without the protection of renters insurance, you would be stuck paying to replace your belongings in case of a mishap, from that expensive television and sound system to all those clothes you wear to work every day. What if a burglar breaks in and steals you Mac? Your landlord cannot be held accountable but you rental insurance might just help you get over that with the least headaches possible.
Unavoidable Circumstances: Depending on the policy, covered perils can include: fire or lightning, windstorm or hail, an overflow of water from a plumbing leak, or any other number of accidental events.
Guests Are Injured: Liability coverage protects you and your family members (including pets) from lawsuits for bodily injury or property damage incurred by guests, as well as court costs and any awards you’re ordered to pay in court.
Sudden Eviction: Living expense coverage gives you peace of mind in knowing that if your place becomes uninhabitable, such as due to a fire, your insurance would cover the cost of your stay at a hotel or elsewhere until you can return.
Roommate Trouble: When your roommate leaves a candle lit, subsequently burning down part of your apartment complex while everyone is at work, wouldn’t you like to protect yourself from his or her behavior?
Nasty Neighbors: When your uninsured neighbor overflows their bathtub above you and water pours into your apartment, destroying your furniture, wouldn’t you like to avoid paying your replacement costs?