Sponsored Content. We may earn compensation if you click the links or buttons below.
Renters insurance covers the cost of your stuff if it's damaged or stolen, but there are common exclusions.
Renters insurance is one of the most valuable and overlooked pieces of financial protection available to renters. Renting is on the rise, but a 2014 survey by Nationwide found that 56 percent of renters between the ages of 23 to 25 don’t have a renters insurance policy. Renters may falsely believe that their landlord will insure their belongings, or that their stuff isn’t worth enough to insure. But if you’re a renter living paycheck to paycheck, or you’re saving up to buy a house, you’re likely living on a budget with little leeway in your finances to replace everything you own in the event of unexpected damages. According to the Federal Reserve, homeowners have on average 36 times as much accumulated wealth as renters. Renters insurance is a highly cost effective, affordable investment to keep you and your possessions protected.
Before looking at what renters insurance covers and what it doesn’t, remember that some of these myths aren’t true: Your landlord will pay for the damages. A landlord or property manager is responsible for damage to the apartment itself, but not your property. So when your neighbor’s plumbing explodes, your landlord’s insurance will pay to replace the pipes -- but they’re not responsible for losses or damage to any of your belongings from the water. Your renters insurance covers water damage to your stuff. Your lease agreement and monthly rent also won’t stipulate any kind of renters insurance coverage, unless your landlord requires you to carry it. Renters insurance is too expensive. A basic renters insurance policy for a single apartment in the Los Angeles area will cost $17.50 per month or $210 per year, with $10,000 in personal property coverage and $100,000 of liability coverage after after a $250 deductible. (Don’t worry, we’ll explain all these terms later.) Annual renters insurance premiums are considerably more affordable than the cost of replacing individual items. Of course, the lower the value of your property, the cheaper your insurance premium will be.
Your personal property A comprehensive policy will cover costs to replace your personal belongings, like your furniture, electronics, computer equipment, your clothes, jewelry and appliances. Basic renters insurance will reimburse you for the loss of property (up to your policy’s coverage limit) if destroyed, damaged, lost or stolen in any one of 16 different events:
Renters insurance can also cover property when it’s not even in your home, like if your laptop is stolen while you’re on vacation; since it’s considered insured property, it’s still protected whether it’s inside your dwelling or not. A renters policy can protect property damage to others. If a broken pipe in your apartment flooded your neighbor’s residence below, your insurance policy should cover damages to their property. Personal liability and medical bills A good insurance policy will also cover costs you may be legally responsible for paying if someone is injured in your apartment. If someone slips, falls and is hurt on the premises, or if your overzealous dog or cat bites a visitor and sends them to the ER, your policy should contain medical coverage to cover injuries without a lawsuit being involved, and liability, in the event you are sued over a mishap. Temporary living expenses If your residence has been made uninhabitable, renters insurance can also cover the cost of a temporary place to live. It may compensate you for everything from hotel bills to the cost of food if it exceeds what you’d normally pay through your grocery budget. Otherwise known as loss-of-use coverage, it’s one benefit of having renters insurance until you’re able to move back in (or find a new apartment). Other types of coverage Renters insurance protects against other losses you may not have thought of, giving more value to the idea of taking out a policy:
Renters insurance doesn’t cover your belongings under certain circumstances:
Take an inventory of everything you own and add it all up. The average renterowns $20,000 worth of personal property, but many apartment people underestimate the value of their stuff. Itemizing your belongings will give you an idea of how much insurance you need. A site like KnowYourStuff.org can get you started. And like any other insurance coverage, be it life, auto, health or otherwise, know the type of coverage you’re seeking. Shop around, compare different plans, and weigh your deductibles versus your premiums to see where you can get the best coverage at the lowest price. Additionally, understand beforehand how renters insurance payouts work. Generally, when a claim is made and losses are being appraised, your insurance carrier may provide you the choice of two policies:
However, there are two considerations that work with both of these policy types to keep you covered:
Also consider other factors that could impact your renters insurance: Just as an alarm system on a car can lower your auto insurance rates, other deterrents to your rental like heavy-duty deadbolt locks, smoke detectors, fire extinguishers, and security systems may help you secure lower rates. On the other hand, if you own certain pets or breeds of dogs that increase your risk of property damage, your rates could be higher. Depending on the breed, you could even be denied insurance coverage. Consider these factors when you’re shopping around. Renters insurance is an inexpensive way to protect your stuff and your peace of mind. While homeowners are usually required by their mortgage lenders to carry homeowners insurance, many renters just leave it up to chance. This is affordable way to give yourself peace of mind, and your property, the protection it deserves, to minimize your expenses and saving you money if catastrophe, theft, fires, vandalism or underwater apartments ever cross your path.
This article originally appeared on Policygenius
Policygenius makes it easy to compare and buy insurance. Since 2014, they have helped over 4.5 million people shop for insurance, and protected customers with over $20 billion in coverage. The team is driven by one simple mission: “To get people the insurance coverage they need and make them feel good about it."Get Started