Let us talk about a topic that is often unfamiliar to most people in a way that is easy to understand and will, in the case of emergencies, save you plenty of headaches. When it comes to homeowner’s insurance, over 95% of homeowners have it. The reason for this is notably obvious; if something in your home goes wrong, you are covered. Think of it like car insurance!
However, only about 37% of renters have opted into renter’s insurance. The reasons for this is often due to misguided information.
- Most renters incorrectly assume they are covered by their landlord’s policy.
- Most renters underestimate the total value of everything they have.
With this in mind, if you just added the value of your electronics alone, you would probably reach the thousands easily.
The last and the most overlooked reason that renters haven opted in for insurance is liability. In short, if someone gets hurt in your home, a friend, food delivery guy, or neighbor, they could sue you. This is quite a scary situation to get caught in. So, let’s discuss the top 5 reasons renter’s insurance is essential.
Reason I: Covers Losses to Personal Property
No, your landlord is not liable for the damage to your personal property. Once again, this is an assumption that can cost a hefty price, in the event of an emergency. A renter’s insurance policy protects against losses to items such as clothes, luggage, electronics, and even jewelry. The average renter owns roughly $20,000 worth of personal property, making this the standard option when opting-in for insurance. Quite surprisingly, a standard home owner’s insurance policy for renters covers losses from a vast amount of risks.
These risks include:
- Damage caused by vehicles
- Fire or lightning
- Volcanic Eruption
- Damage from water
- Damage caused by an aircraft
So, in the case that a volcanic eruption occurs under your apartment, you could be covered for your really nice $1,200 high definition TV. Don’t you think it’s a smart move to insure your personal belongings? With that said, as you decide to pick a insurance company, it is important to pay attention thoroughly to the details. Depending on the company and insurance policy, you may not be covered for certain perils like floods or earthquakes. Do not forget to always compare prices and read the fine print.
Reason II: Travel with Security
One other beneficial aspect about having renter’s insurance is you are covered even when you are across the world. In the case that you go to vacation in Thailand or Paris for two weeks and a theft or fire occurs in your apartment, you are covered from such events, even as you sit on a beach in the Bahamas.
This is a good deal considering that while you are on vacation, you are also receiving peace of mind.
Reason III: Provides Liability Coverage
This is one of the reasons why renter’s insurance comes in handy! In the case that a neighbor or family member is accidentally injured in your apartment, your liability coverage would cover all potential expenses, depending upon the policy limit.
Of course, you can request a higher coverage, but for the most part, insurance policies provide between $1,000 and $5,000 for medical-payments and at least $100,000 of liability coverage. In the case when you need more than that, ask your insurance company about an umbrella policy. This policy can cover up to $1 million worth of coverage for a yearly payment of $150-$300.
Reason IV: Covers Living Expenses
In the case that an emergency does occur and your apartment happens to be uninhabitable, your policy may cover “additional living expenses.” These expenses can include: food, temporary housing, and more. Make sure to ask your insurance company the length and amount you are covered for in the case you cannot live in your rental home or apartment.
Reason V: It Is Not Expensive
This is where most people tend to be shocked. Renters insurance is not that expensive! The average renter’s insurance policy costs about $187 a year, according to the NAIC in 2013. All of this of course depends on the coverage that you request, whether you live in an apartment or in a home, the state that you live in, and the minimum coverage your landlord requests.
When it comes to insuring your valuables, never underestimate the value of your personal items and what emergencies can occur. For a standard rule of thumb, you will want to find a rental policy that follows these guidelines to protect your belongings in any emergency.
What you are covered for:
- Sports Equipment
- Hotel bills and meals if you cannot stay in your home.
- Belongings in an off-site storage facility on the premises.
Subject to limits or extra coverage:
- Security and money
- Gift Cards
Not Covered by most policies
- Intentional Damage
- Vermin Infestation (ex. Bed Bugs)
- Earthquake Damage
- Floods due to natural causes
Understanding the importance of renter’s insurance will inspire you to take an extra measure in securing your future from any possible accidents or events. You can walk out and about with a bit of added security knowing that your home and your belongings are safe.