Why getting renters insurance is a smart financial decision: Life happens and with that there are many unforeseen events which could leave you unprepared, except for when you are. Surprising benefits of getting renters insurance you didn’t know.
Should you be getting renters insurance even if you are only just renting a home or an apartment as opposed to outright owning it? The simple answer is yes- and there are many compelling reasons why ultimately it is a smart financial decision.
Many landlords and property managers require their tenants to carry it. But even if you aren’t required to purchase renter’s insurance, getting covered makes a lot of sense.
Renters are increasingly embracing renters insurance as a low-cost way to protect their property, with 57% of renters holding insurance in 2020, up from just 31% in 2012, according to the Insurance Information Institute.
So let’s look at the following reasons below why you should be acquiring renter’s insurance and why it makes financial sense.
1/ Renters insurance is affordable
While rising interest rates have led to higher mortgage rates amid already sky rocketing home prices and a squeeze on rentals as home buyers are now forced to look for accommodation elsewhere – the question no longer becomes should ‘I own a home or rent?’ – but where to rent?
The average premium for homeowners insurance is $117 per month, whereas the average cost for renters insurance is just below $19 a month — a fairly low price for your peace of mind. Which reminds this author, here are some fun facts about Progressive insurance if you are trying to figure out what renters or home insurance policy might be best for you.
Perhaps the biggest benefit to buying renters insurance is knowing that your insurer will have your back during incidents which you have no recourse. Like when you check your bag and realize your phone was stolen on the subway, or you come home to find that someone took your bike. Or a sudden falling tree from outside (never mind a plane crashing into your home) smashing against your rental home and destroying your personal items.
2/ It covers your belongings even if you’re not at home
So if your phone is stolen from your local coffee shop, or your laptop is taken while you’re at your co-working space – your policy has you covered. Even if your stuff is stolen outside of your home, renters insurance will reimburse you.
Plus, if your kitchen goes up in flames or your sprinklers go off accidentally and flood your apartment, you’re also covered.
3/ Your personal property is probably worth more than you think
Many people may not realize the value of carrying renters insurance because they don’t realize just how valuable their personal property is.
Consider the average two-bedroom apartment in the US, which according to US News includes about $30,000 worth of electronics, clothing, jewelry, bikes, and more.
Armed with renters insurance, you’ll know that in the even should your personal belongings be lost, damaged, or destroyed by a covered event—like a fire, lightning, windstorm, theft, or vandalism—your personal property coverage can help cover the costs of replacing those items. Without renters insurance, you’d be on the hook for those expenses.
4/ Your landlord’s insurance won’t cover losses to your personal property
Don’t be deceived into thinking, just because your landlord carries landlord insurance, that you shouldn’t be purchasing your own renters insurance policy?
It turns out that landlord insurance and renters insurance don’t cover the same things—most notably, while your landlord’s policy will cover any property they own, it won’t cover your personal belongings. Something to keep in mind especially if your personal items are worth a lot or getting your fashion wardrobe up to speed took a lot effort and bargain hunting.
Coverage typically starts at $10,000 and goes up to $100,000.
5/ It protects stolen items
If someone breaks into your apartment or vehicle, you can file a renters insurance claim to receive cash restitution for any stolen or damaged belongings within your coverage limits. This coverage extends for your belongings stored outside, like a bike, or within your vehicle. It also covers you if you are not at home to cover theft that occurs off-premise of your home.
Of course there are caveats, including showing that your bike was locked, you car wasn’t left with the car keys in the ignition box or forgetting to close your home door on account of you being late and trying to make the approaching bus.
6/ Renters insurance covers animal pet bites, scratches
In the event you own a dog and were wondering “Does renters insurance cover dog bites?“ you’re in luck. If your dog bites someone, your policy has you covered. Better yet, your coverage applies whether your canine bites someone at your home or while playing at the dog park down the road. Ditto if your kitty cat scratches someone in the eye while visiting you to your horror.
There are two exceptions, though: You’re not covered if your dog has a history of biting, or if your dog is categorized as high-risk. So keep that in mind.
7/ Renters insurance may help you out if you’re forced out of your apartment
If a kitchen fire forces you out of your apartment, or your upstairs neighbor leaves their faucet running all day and floods your apartment – your policy may cover something called loss of use. It helps you out with temporary housing and some other basic living expenses until your abode is habitable again. Which would be a welcome relief and help save on the potential of horrendous hotel bills in the interim.
8/ Renters insurance covers medical costs for injured guests
Whether from a dog bite, cat scratch or one of your dinner guests slipping at your home and hurting themselves, your renters insurance policy kicks in and will help cover the cost of most medical injuries. But there are caveats.
If the damage is something small (under $5,000), your coverage for medical payments to others will kick in, but if your friend decides to take some unfriendly steps and sues you, then you will be out of luck, save for if you have also taken out personal liability coverage exactly for those unforeseen events that so often happen in life when you least expect them.
9/ Renters insurance may cover the costs if you’re sued
Your policy protects you in cases where someone claims to be injured due to your actions or negligence. Your renters insurance will cover legal fees if you need a lawyer to defend you, and will also pay to cover damages you’re found liable for.
So, that neighbor who cut his finger in your kitchen? Say he went to the hospital, got stitches, and then sued you for the cost—your liability coverage may jump in to save the day.
Liability coverage normally starts at around $100,000, which can become very useful when legal bills and medical fees start racking up.