Is Renters Insurance Really Necessary?
At the end of moving day you pay the moving truck driver, order pizza and relax…unpacking will start tomorrow (maybe). As you try to fall asleep the first night in your new apartment, a bit of panic starts to set in. You toss and turn, you can’t fall asleep. You start “analyzing” the probability of a fire or break in. By now you are completely wide awake and the self-doubts and questions begin. What if you lose all of your “stuff”? Could you afford to replace everything? Should you be buying renters insurance
? Do you really need renters insurance? Who do you call? How much will it cost?
Whether or not to buy renters insurance is a question that is often asked and answered with little thought. Such an important question gets little thought because most renters either believe they do not need it or it is too expensive to bother with. Unfortunately renters insurance is often misunderstood by many people. Hopefully by reading some facts about renters insurance any misunderstandings you may have had will be made more clear.
Oh No, Another Expense
If you own a car or house and religiously pay your insurance premiums you probably already know that insurance is not one of your diminishing expenses. At renewal, your premiums usually increase, rarely decrease. You pay your premiums year in and year out but unless you have a claim you get no return on your premiums. If you believe that you pay way too much for insurance and can go without it, you are not alone. Many people feel they pay too much in insurance premiums.
With the cost of everything going up nowadays many individuals are looking for ways to cut expenses and insurance always seems like easy pickings. But be careful, even though you feel as if you are over insured and overpaying on your insurance, you may want to cut out your café lattes before cutting your insurance expenses…especially if you rent. Renters insurance is really not that expensive, especially when you consider what you get for your money.
Fact #1 – What Is Renters Insurance?
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Security
Quite simply put, insurance buys security. For example, you pay a $900 annual home insurance premium so that if your $300,000 home burns to the ground your insurance company pays $300,000 to rebuild it. The insurance company frees you from the threat of losing your home because of being unable to pay $300,000 out of your own pocket to rebuild it.
If you rent, renters insurance also buys security. If you have personal belongings (we all do) and you want to limit or avoid certain liability issues, you should look into buying renters insurance. The insurance company will free you from replacing your stuff with money out of your own pocket. But many renters short change themselves when they ask themselves why do I need renters insurance if I really don’t own any expensive stuff. That’s the wrong question to be asking. Instead, ask yourself how much is renters insurance and how much are you willing to pay for security?
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The Unexpected
Insurance also takes care of the unexpected and unpredictable. No one can predict if or when there could be a loss such as a fire or break in to their apartment. If you have renters insurance there are certain causes of loss that your belongings are covered for. These include fire and smoke damage, theft, vandalism, lightning, electrical issues. If lightning strikes your apartment building and there is a fire, the only way for your stuff to get replaced is renters insurance. Even though many people believe their landlord is responsible for covering a tenants belongings after a disaster, that is incorrect. Your landlord is responsible for insuring the building, not your personal belongings.
Fact #2 – What Does Renters Insurance Cover?
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Your Belongings
Your personal belongings may not seem like expensive stuff but if you had to replace all of them at one time, could you?
With renters insurance if there is a loss you will have coverage for your clothing, computers, furniture, jewelry, appliances and even temporary living expenses if you have to live somewhere else. Imagine if you had to pay for all of those items out of your own pocket? Are you willing to take that risk? For pennies on the dollar you could buy the security of knowing that if a disaster did occur, your belongings would be paid for and you rebuild your life with a bit less stress. Renters insurance is not as expensive as homeowners insurance because you are only insuring your contents, not the building. Whereas with a homeowners insurance policy you insure contents and property.
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Liability Issues
Your renters insurance policy also carries a personal liability section. If a “non-resident” were to injure themselves while at your place, your policy would pay for their medical expenses. And if they were to sue you, your policy also pays for those costs.
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Your Temporary Living Expenses
If after a fire loss for example you could not live in your apartment for a while, your renters policy would pay for you to live somewhere else until your place was brought back to livable conditions. These expenses could include hotel costs and meals.
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Your Miscellaneous Items
Just as with a homeowners insurance policy, if you own expensive jewelry, such as a wedding ring for example, you can “schedule” that item separately. You will have to pay a little extra in premium but if your ring is lost, stolen or damaged that extra premium will be well worth it.
Don’t Delay, Buy Renters Insurance Today
During the process of moving your mind is cluttered with numerous details. Do yourself a big favor, put renters insurance on your “important do-to list”. That way, instead of waiting for a loss and then kicking yourself for not buying renters insurance, you will rest easy. So right after you sign the rent agreement, call your auto insurance agent. Ask for a renters quote. If the premium seems too high, you can lower it by increasing the deductible or asking if you get a discount for also insuring your auto with the same company.