Do I Need Renters Insurance?

According to ValuePenguin, there are more than 43 million households occupied by renters in the U.S., accounting for 37% of all households, however, despite the large number of renters, 60% of them do not have renter’s insurance . Since the average cost of renter’s insurance is relatively low, it begs the question of why so many Americans aren’t protecting themselves and their possessions with renter’s insurance?

If you are a renter, you need to understand why it’s always a good idea to purchase renter’s insurance.

You Can’t Rely on Your Landlord’s Policy

While your landlord will most likely carry a policy that covers the actual building you are living in, only a renter’s policy will cover your personal property. Yes, you even need renters insurance if you are living in an apartment. If a burglar breaks into your apartment and steals your jewelry and/or your computer, don’t expect to call your landlord for compensation – that is what renters insurance is for. Most standard renter’s policies cover replacement costs of personal items lost or damaged through theft, fire, water backup damage, vandalism, and certain natural disasters.

Side note: Most people underestimate the value of their possessions.  Keeping an inventory of your belongings with the purchase receipt, when possible, will help keep you organized and expedite the process when it comes to filing a claim. The payout on your claim will be determined on whether your insurance uses an actual cash value, or replacement value system when compensating you for your loss.

Renter’s Insurance Covers Your Possessions Outside Your Home

Renter’s insurance coverage usually protects the valuables you have with you in your car, or those you take with you when you travel. If your golf clubs are stolen out of your parked vehicle or your luggage is lost while traveling, your rental insurance will often cover your lost or stolen personal property. Keep in mind that most claims are subject to a deductible and many policies have a maximum dollar limit on certain items. If you have valuables, such as a wedding ring or family heirlooms, you might consider adding additional insurance in the form of a rider to insure proper coverage.

Renter’s Insurance Covers You for Personal Liability

Whether you are a homeowner or a renter, accidents happen. Having insurance protecting you from unexpected medical and legal bills resulting from what is considered your fault or negligence, can prevent you from draining your savings in the event of an accident. So, if a guest trips on your child’s toy and falls down the stairs, or, your generally good natured dog bites your visiting neighbor, renter’s insurance coverage provides liability protection for the unexpected. It is best to know exactly what is covered when it comes to personal liability in your renter’s insurance and make sure your policy works best for your situation.

Renters Insurance is Relatively Cheap

While the cost of renter’s insurance varies from state to state, the average policyholder can expect to pay around $118 per year for their coverage. Typically, those living in states with a higher than average rate of natural disasters can expect to pay more than those renting in states that typically escape frequent earthquakes or extreme weather conditions. However, even when faced with paying as much as $244 for insurance like the typical renter in Mississippi, it pales in comparison to the monetary damage which can result  from an accident, theft or fire. If you are a renter, make sure you have the money for renters insurance by creating a budget that works.

Has renter’s insurance ever saved you from a financial disaster?

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