For many renters, their house is still a home, even if they don't own it. If you are a renter, you understand how much time and money you have invested to make your home a comfortable place to come at the end of the day. Between furniture, electronics, art, décor, and jewelry, you have placed a lot of value on the belongings inside your condo or apartment. You are responsible for protecting your own belongings, and that is why renter's insurance is crucial.
How much is it?
Renters insurance is one of the most affordable forms of insurance. The average cost of renters insurance is $12 per month according to the Independent Insurance Agents & Brokers of America. For less than the price of a combo meal, you can protect your home and possessions in case of a burglary or other damage.
What about the landlord?
Landlords are required to carry insurance on the buildings he owns. The insurance that your landlord carries only covers his buildings, not your belongings or your liability for accidents. If your apartment kitchen catches fire or if your possessions are stolen during a break-in, the landlord may replace the appliances or fix the broken window, but a renter’s insurance policy is the only way to recover the value of your personal items lost.
What is covered?
Your coverage depends on your policy; consider all of your options before picking the cheapest plan available. Renters insurance typically covers furniture, appliances, televisions and clothing from damaged due to fire, smoke or water damage.
However, tenants should also be sure that their policy provides coverage for vandalism, malicious damage, and falling objects. Some policies cover living expenses if you’re forced to live elsewhere due to a covered loss.
In addition, some policies may provide additional protection beyond the occasional household theft or damage. For example, renter’s policies may protect your luggage if it is stolen while on vacation, or if your computer is stolen from your car. These coverage options are important to discuss with your local agent.
How much coverage do I need?
The amount of renter’s insurance that you should purchase depends on your personal situation, net worth, and tolerance for risk. To help you determine how much rental insurance you should purchase, you should take some time to make a comprehensive list of everything you own and what it would cost to replace.
This includes everything from clothes and jewelry to your bedding and spice rack. Don’t forget about electronics, cell phone, furniture, and collectibles. When evaluating how much coverage you need, always round up for an extra cushion of protection.
How does my insurance pay for my stuff?
Your insurance company will pay you back for lost items depending on the type of policy you have. If you have an “Actual Cash Value” policy, the payout amount will be equal to the cost necessary to replace your items minus the depreciated value. If your policy is a “Replacement Cost Coverage” plan, the insurance company will pay you back exactly what you paid for the items. Because Replacement Cost Coverage typically pays out more, it is more expensive.
Do I really need liability coverage?
Similar to homeowner's policies, renter’s insurance doesn’t only cover “stuff” it also covers liability. If your policy includes liability coverage, this helps to pay for those who may be injured on your property or while in your home. If the mailman slips and falls on your steps, or if a neighbor is burned on your fireplace, without insurance you’re 100% liable to pay damages out of your own pocket. With insurance, your policy will help cover medical bills and legal defense fees.
Am I required to have it?
In some cases, yes, renter's insurance is required by the landlord. It is important to read and understand your lease. If you are required, be sure you understand what clauses must be included in the policy.