It May Be Foolish to Forego Renters Insurance

Image courtesy of: Daria Shevtsova

You probably feel that your monthly rental payments are too high already, so the idea of an added expense for Renters Insurance seems unnecessary. Remind yourself of all that stuff you lugged into your new home and may still be unpacking.

Those heavy boxes contain items of value, how would you replace them if they were stolen or damaged? And don’t think you can rely on your landlord insurance. Their insurer only covers the building, not personal possessions of tenants. You cherish and work too hard for your possessions; in case of an emergency, Renters Insurance can provide you with peace of mind.

What Exactly Is Renters Insurance?

Your Renters Insurance policy, sometimes called tenants insurance, picks up where your landlord’s policy leaves off. Your landlord surely has their own policy, but in case of fire, water damage, theft, or other emergency, their landlords insurance will only cover the building and not your personal belongings. Should your home be severely damaged by fire and you need a find temporary shelter, a good policy will also cover your emergency living expenses, including costs associated with renting storage units.

One perk of insuring your personal property through Renters Insurance is that your stuff will often be insured outside your home. If someone were to swipe your laptop from a coffee shop, it may be covered under your Renters Insurance policy. In addition to personal property coverage, it also provides liability coverage, which includes medical expenses — up to the policy limits, of course.

This should cover you should you or one of your guest’s get injured at a dinner party or your dog gets out and bites a neighbor. Most policies will cap-out at around $100,000 for liability, if you feel you need more, you’ll want to ask your insurer about higher limits in an umbrella policy.

How Expensive Is Renters Insurance?

Renters insurance is generally much more affordable than other types of policies, such as auto insurance, and in most areas, basic policies will run you about $15 to $30 per month. It’s important to note that when shopping for an insurer, you’ll need to decide if you want coverage for the replacement value or actual cash value of your possessions.

Know that by opting for cash value, your insurer will take into account the depreciated value of your property, which means that you’ll probably incur expenses replacing them as new. So, if your $500 couch is five years old, expect to receive a lot less for it. But policy pricing will also depend on the value of your insured property, whether you’ve decided to bundle your Renters Insurance with your auto policy, and the amount of your deductible.

Whatever the cost, it’s still plenty cheaper than replacing everything out of pocket. Because the policies are relatively inexpensive, it would be ridiculous to forgo it; besides, many landlords may require it.

How Much Coverage Do I Need?

Most people have no idea how much their stuff is worth, even venturing a guess, most people will far undervalue the cost to replace their personal property. If you consider your clothing, furniture, appliances, electronics, and jewelry, the replacement cost can be $20,000 to $30,000 or more .

It’s worth noting that for collectibles and other rare or expensive items, you may need an additional rider to be covered for any losses. To help ensure that you’ll be covered for your lost possessions, take a detailed inventory, and estimate the value – you might be surprised by the replacement cost. When possible, safeguard receipts and take pictures or videos of your belongings as proof for your insurer.

Renters insurance is too cost-effective to go without. Playing the odds is too risky when you consider what it would cost to replace your belongings. Even if you think that you can trust yourself, can you be sure that your neighbor won’t start a kitchen fire that damages your home and possessions?

Posted in: 2. Tenant Blog Posts, Rental Living

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