It’s common knowledge that if you own a home, you most likely need homeowners insurance to protect your investment and belongings. But if you rent a home or apartment, there’s a misconception that you don’t need similar insurance protection.
This is far from the truth. Renters insurance protects you from damage or loss of your personal belongings just like homeowners insurance.
Let’s imagine there’s a fire in the apartment building where you live. Your landlord’s insurance surely will pay for damage to the property, but none of the contents inside will be covered. You could be left with nothing, nowhere to live and no money to restart.
If there is a fire, theft, storm damage, or accident where you live, renters insurance, like homeowners insurance, can cover your loss. But unlike homeowners insurance, renters insurance doesn’t cover the property since you don’t own it. It does cover your personal belongings, offer liability coverage, and provide additional living expenses.
Be sure you read your policy carefully. There are disasters that usually aren’t covered, including floods, earthquakes and hurricanes. If you live in a high-risk area for these, you may want to buy supplemental insurance to cover you.
This is the question you need to answer when deciding how much renters insurance coverage to purchase. Let’s go back to the fire in your apartment building. Assume it was a total loss and you have nothing left. Do you know how much your belongings were worth? You might be surprised to realize just how much you have.
Take an inventory of everything you own by making video or shooting photographs. Also save receipts and owner’s manuals for large purchase items, if possible, and keep the information safe at an offsite location.
Renters insurance is typically much less expensive than homeowners insurance, yet it can bring you the same protection. According to the Insurance Information Institute, renters insurance premiums usually range from $100 to $140 per year.
Of course the actual amount will depend on where you live, the coverage amount you choose, supplemental coverage, discounts, and the deductible (the amount you’ll pay for damages before your insurance kicks in). Remember, the higher the deductible the lower the premiums.