Most Americans consider auto and health insurance priorities, but when it comes to renters insurance, they don’t buy. Considering what’s at risk, renters insurance really is a no brainer. Here’s why.
You Risk It All
You may avoid buying renters insurance since you feel you don’t own enough to warrant it. However, most people are shocked when they do a home inventory.
Could you afford to replace expensive items such as your tablet, laptop, or iPhone? Could you afford to live and eat somewhere else if your apartment in uninhabitable?
What if disaster struck and destroyed everything you own? Think about how much it would cost to replace your clothes, shoes, television, furniture, and household goods – it all adds up fast.
Your Landlord’s Insurance Doesn’t Protect You
Your landlord insures the building against perils such as fire, but that coverage does not extend to your personal property. Equally, your landlord’s liability coverage doesn’t extend to you. You need your own policy.
Someone Could Sue
You might think this is an unlikely scenario, but it happens more frequently than you might think. A guest could injury themselves in your rental unit and come after you for medical bills and compensation if they can’t work.
You’ll pay legal fees and court costs, and a settlement if you lose the case. A judgment can affect your future earnings too. Ignoring renters insurance could pay paying off debt for years.
Another possibility is your actions cause damage to someone else’s property in the building. For instance, you left a tap running and it seeped through the floor into your neighbor’s apartment below. Are they going to willingly pay their insurance deductible or buy new items without coming after the person that caused the damage? Not likely.
A study conducted by Rent.com found only 40% of renters carry insurance. The other 60% believe it would be too expensive. However, the opposite is true.
According to the National Association of Insurance Commissioners, the national average is $187 for a renters policy. Value Penguin reports the cost in Rhode Island in 2019 is even less at $182, or $15.17 per month.
That’s less than the cost to buy two tickets to the movies or a handful of coffees at Starbucks.
You Might Pay Even Less
Renters insurance can often cost less than the amounts quoted above. Your premium depends on what you insure, where you live, and whether your rental unit includes safety features such as smoke detectors, a sprinkler system, or deadbolts. You also have the option of choosing replacement value or actual cost value including depreciation which offers a lower premium.
Many insurers offer discounts when you bundle your renters insurance with your auto coverage too. You may also qualify for a discount if you belong to a professional organization or you’re in the military. Additionally, you can choose a higher deductible for a lower premium.
It Protects You Against Many Risks
Renters insurance typically covers perils such as fire, smoke, lightning, wind, hail, snow, sleet, falling objects, explosion, vandalism and theft, and more. It also covers specific damage from HVAC systems, plumbing systems, fire sprinklers and appliances.
Renters insurance also covers any items “in your possession”, so if you borrowed your friend’s costly tool and it’s stolen, your policy covers you up to the policy limit.
It Can Provide Additional Living Expenses
Renters insurance can reimburse you for temporary accommodation such as a hotel room or apartment if you’re unable to stay in your rental unit. It may also cover restaurant meals if you can’t live in your place and need to eat out.