Do you rent an apartment or home? Make sure you’re protected
The forgotten stepchild of the insurance world is renters insurance. Due to the high cost of the housing market, more and more people are choosing to rent over home ownership. However, while 95% of homeowners have insurance, only 41% of renters do, according to a 2016 Insurance Information Institute poll.
There are many reasons why renters might choose not to buy insurance. “One explanation is that many people incorrectly assume they are already covered by their landlord’s policy,” According to Investopedia. “Another reason is that people underestimate the value of their belongings. If you add up the value of just your clothing and electronics, it probably wouldn’t take long to get into the thousands of dollars.”
4 reasons why you should buy renters insurance
1. Renters insurance helps replace your belongings.
The landlord’s property insurance is only meant to cover the building. Renters insurance covers your personal belongings, including clothes, furniture, electronics, and computers. It’s essential to have if your building ever suffers damage that requires you to replace any – or everything – you own. “Even if you don’t own much, it can quickly add up to a lot more than you realize – and a lot more than you’d want to pay to replace everything,” according to Investopedia.
Typical renters policies protect against a wide range of things, including: fire, smoke, a storm, theft, vandalism, falling objects, damage from water or steam such as a leaky pipe, air conditioner or sprinkler system, and other instances.
IMPORTANT NOTE: It should be noted that renters policies do not usually cover flood or earthquake damage. Those usually require separate policies or riders attached to an existing policy.
2. Renters insurance is inexpensive.
Renters insurance is very affordable. Depending on the amount you want to cover, a typical policy can costs less than $200 a year according to the Insurance Information Institute. The cost will depend on how much coverage you want, the deductible, and where you live, of course.
3. You might not have a choice.
Some landlords actually require tenants to purchase renters insurance. They may even want to see proof of a policy before you sign a new lease or renew an existing one. “This could be the landlord’s idea, or it could be an ‘order’ from the landlord’s insurance company – the idea being that if the tenants are covered themselves, some responsibility can be shifted away from the landlord,” according to Investopedia.
4. Renters insurance offers liability protection.
If someone is injured in your apartment, you could be held liable for that person’s medical expenses and lost wages. Renters insurance will protect you in case you are sued. “Most renters insurance comes standard with liability coverage…if your dog bites someone or if you accidentally start a fire that damages an adjoining apartment, your insurance will insulate you from legal action and damages,” according to US News & World Report.
Renters insurance can even protect you from liability and safeguard possessions outside of your apartment, such as in a parked car. It may also protect your belongings when you’re travelling.
Note: Pay attention to the type of coverage being offered.
Other than the coverage amount and the deductible, the most important thing to determine is if the policy offers replacement cost coverage (RCC) or actual cash value (ACV). This could affect how much money you get to replace your belongings. “The first [RCC] will pay to replace your 15-year-old carpet…at current market rates, while the second [ACV] will only reimburse you for the value of a carpet that’s 15 years old,” according to Investopedia.
Renters insurance offers important protections if there is ever damage to your rented apartment or house. Don’t neglect this coverage, so you will be able to replace your things and get back to a normal life. If you have any questions about obtaining renters insurance, contact Avante Insurance today.