While millions of people from college students to retirees live in a rented home, far less than half of them protect their assets with renters insurance. In fact, a significant portion of these people aren’t even aware that renters insurance exists. However, this is a serious problem as renters insurance is very affordable and covers a variety of losses than a renter might suffer. Those who rent their home should become familiar with how renters insurance works in order to understand the importance of this type of coverage and the reasons for obtaining it.
Renters insurance works in a similar manner to home insurance. Renters insurance covers personal property damaged or lost due to theft, fire or other event. In addition, renters insurance protects renters from other types of losses. Most renters insurance policies protect renters from a variety of different liability issues. For example, if a guest is injured in the apartment, the insurance would cover all or a portion of the costs of that person’s injuries. In addition, the actions of the renter could damage the building in which he or she lives or the personal property of others. For example, an overflowing bathtub could damage a building’s structure and ruin electronics in an apartment on a lower floor. In this event, the renters insurance would also help to pay for the damages and reduce the renter’s financial loss.
Many renters who are familiar with renters insurance believe that they do not have enough assets to require insuring. However, most would be surprised to learn the total value of their personal items. A renter should carefully consider how much it would cost to replace all of their furniture, clothing, electronics, jewelry and other possessions. Even the belongings in a small apartment can easily be worth tens of thousands of dollars in replacement costs. For young people just starting in life or others without significant savings and assets, even the loss of a relatively moderate amount of personal possessions could prove to be financially devastating. Renters who own particularly valuable items may need special coverage, called an insurance rider, for these items. For example, an expensive engagement ring, a valuable family heirloom or a collection of sports memorabilia may need to be separately covered under a rider.
Some renters also believe that their landlords or apartment management companies have insurance coverage on their personal property. However, this is most often not true. We talked with Roman Financial Group who explained, “Landlords or managers may have coverage on the building, but it is rare for them to have any coverage on the possessions of renters. Of course, damage or loss of personal possessions due to building owner or management negligence would not be the legal responsibility of the renter. However, collecting on a loss from an owner or manager would likely take some take and effort on part of the renter.”
Renters who are considering purchasing renters insurance are often surprised at how inexpensive it can be. Though costs vary depending upon a number of factors, the average cost of renters insurance is about $15 per month. As numerous companies offer renters insurance in most states, those interested in obtaining coverage should compare policies from different insurers to obtain the best deal. As another way of saving money, renters who buy other types of insurance, such as auto or life, from the same company can often obtain discounts to reduce the costs of insurance even farther. Renters insurance is even quick and easy to obtain. In most cases, coverage can be acquired online or over the phone in just a few minutes.
As renters insurance is relatively inexpensive and provide renters with valuable protection against financial loss, every renter should carefully consider obtaining coverage.
