Is buying renters insurance worth the extra expense? For most people, homeowners insurance and auto-insurance are required expenses. Renters insurance, however, is not required by anyone. It’s one of the most under-utilized types of insurance despite its valuable coverage.
When you rent an apartment, your landlord most likely has insurance to cover structural damage to the building, not your individual unit. That means if there is any damage or theft to your apartment, you would be left with nothing.
When I rented my first apartment, it was broken into when I was out of town. When I got home, my roommate’s television was gone as well as my laptop and some other household appliances. We did not have renters insurance at the time so nothing was covered and there was nothing we could do about it. Ever since then, I’ve purchased renters insurance for every one of my apartments. Here are some things to know when considering whether or not it’s a necessary expense:
What does renters insurance cover?
Theft or damage done to your furniture, clothes, electronics, household appliances, or any of your other personal belongings is covered by renter’s insurance. It also covers any additional living expenses you have in case you need to move out for repairs or rebuilding. Besides covering your personal belongings, renters insurance also provides liability protection. That includes any injuries that visitors to your apartment may sustain. So if a guest of yours falls down the stairs and breaks their leg, renters insurance will cover the cost of medical bills as well as legal representation if you get sued for the injury. Hopefully none of your visitors will sue you!
How much does it cost?
The National Association of Insurance Commissioners averages the cost of a basic renters insurance policy to be between $15 and $30 a month. A small price to pay for the thousands of dollars you can lose from theft or damage!
Actual Cost Value vs. Replacement Cost Average
Actual cost value covers only what your property was worth at the time it was damaged or stolen, not what you paid for it when it was new. Replacement cost average pays what it costs to replace your stolen or damaged item. So say your laptop is stolen, you would pay out of pocket for a new one and send the receipt in to your insurance company for a reimbursement. Replacement cost average requires a higher premium but could be worth it in end.
Some things to be aware of:
-Do an inventory check of your apartment and note the value of all of the items you own to see how much coverage you need.
-Dogs can be considered a risk. Certain breeds of dogs, especially those considered aggressive, can prevent you from certain coverage. Make sure you look into this when reviewing your options.
-There are limitations- Many insurance companies limit the amount of money you can get to replace high-end items such as fine art, electronics, and jewelry. If what you have isn’t properly covered, it might not be worth it.
