Renters Insurance - Do I Need It?

Renters insurance has become an important factor for the thirty-five million Americans who lodge in the rental units. This type of insurance can help protect against theft, fire, vandalism or in case of a liability lawsuit which can stem from someone injuring themselves from the apartment or rented house. Many renters mistakenly believe that their landlords insurance will cover any loses they suffer; however this is not the case. Landlords typically carry insurance in the property itself therefore the contents of your household are unprotected.

Do you need renters insurance? A simple exercise can help you find your answer. First take a look around your living space and think about what it would cost to replace the items you own. Make a list of all your belongings, furniture, electronics, clothing and anything else of value to you. Now start assigning prices to each of these items, it may be difficult to assign cost to everything you own but it is ok to guess. When you are done assigning prices add everything up. Do you have enough money available to replace these items if there were a fire? Many of you may not, and even if you have money available think about the other cost that will be associated with such a disaster. Not only will you have to replace your belongings, you’ll need temporary housing and eventually a new place to live. An insurance policy which covers all these items cannot only save your money but can also give you peace of mind.

There are some things to keep in mind when considering rental insurance policies. First the amount of coverage you will need will be a major factor in the price of the policy, think carefully about the amount of coverage you purchase since buying too much insurance can be costly. You can go back to our previous exercise to determine the dollar amount you’ll actually need. Another factor you will have to consider is the deductible you would be paying; a deductible is the amount of money you must pay before the insurance company’s coverage begins. If you choose a higher deductible you could reduce the monthly cost of your policy, you will also need to decide what type of reimbursement you are seeking. Actual cash value reimbursement with provide you with the cash value of your items at the time of loss, while a replacement cost will provide you with reimbursement to receive comparable replacements. For instance if you have a 3 year old computer estimated at $300 at the time of the loss you would receive $300 if you had an actual cash value policy. However if you opted for the replacement cost option your insurance company would provide you with the funds to buy a comparable computer system. While the replacement cost option is a little more expensive it may actually be of better value.

How much does rental insurance cost? Well I am happy to say it cost a lot less than you might think. The average policies cost anywhere between $10 - $25 per month, even though this is really inexpensive I recommend that you compare prices and shop around. If you already have an insurance policy through a company contact them first to see if they offer multiple policy discounts. Also be sure to ask about any discounts you may qualify for such as maintaining smoke detectors in your home, installing dead-bolt locks or additional discounts if you are retired.

Finally to save even more on Renters Insurance pay your premium in one payment, which will save you on monthly installment fees.