Rental Insurance Considerations

Most renters underestimate the importance of having renters insurance. They mistakenly believe that, because they rent their property, they do not have the same need for insurance that homeowners do. This is actually a myth, and renters insurance is a critical financial protection for anyone who rents his or her home. For a very small monthly fee, you can get protection on your personal belongings as well as liability coverage. If anything ever happened to your rental, the costs could be astronomical, which is why renters insurance such an excellent investment. Below, we’ll discuss four of the most popular myths about renters insurance.

1. The landlord’s insurance policy has me covered. For the most part, landlord insurance policies will cover only structural damage to the property itself. And, in some cases, the policy won’t cover the damage at all if a tenant caused it. For example, if you left the water running in your apartment, and it ruined your floors and flooded your downstairs neighbor’s unit, you could be liable for all of the ensuing damages. Similarly, if your apartment building were to catch fire, your landlord’s policy would pay for the damages to the building but would not pay for the damages to your possessions.
2. It’s unaffordable. This could not be further from the truth. Renters insurance is actually one of the most affordable types of insurance out there. For as little as $10-$20 per month, you can get all of the protection you need. If you’re really concerned about your rates, you can always raise your deductibles. If you want to be reimbursed for the replacement value of your belongings and not what they’re worth after depreciation, you can opt for replacement value coverage instead of actual cash value. This coverage is slightly more expensive but well worth it.
3. I live in a safe area. Renters insurance doesn’t just cover theft, vandalism, and burglary. For instance, if your luggage is stolen while you’re away on vacation, your policy might cover it. Likewise, if something of value is stolen from your vehicle, your renters insurance policy will likely reimburse you. In addition, if a guest in your apartment is injured, renters insurance will cover his or her medical expenses and provide you with legal counsel in the event of a lawsuit.
4. My belongings aren’t worth insuring. You’d be surprised how valuable an apartment’s worth of things can be. To give you an idea, the average renter has about $30,000 of personal belongings that are not covered by the landlord’s policy. Could you afford to replace $30,000 of lost items?

Additional Resources:

• Insurance- Homeowner and Renter’s
• 4 myths about renter’s insurance