I was an insurance agent for over 37 years and one of the questions that came up time after time was:
Should I Buy Renters Insurance?
As an insurance agent my answer would always be…… YES. But the follow-up question would always be ……. WHY?
In this article, I want to first define Renters Insurance. Then I will identify sound reasons one should strongly consider the purchase of Renters Insurance. Once convinced of the need, I will show that cost should never be an excuse not to purchase Renters Insurance. Finally, I will provide a list of Insurance carriers that offer a Renters Insurance policy to the insurance buying public.
What is Renters Insurance?
Renters Insurance is a homeowner’s policy designed for those who don’t own their own home. A Renters Insurance policy will cover your belongings if they are stolen or destroyed by a named peril (Fire, Lightning, Wind, Hail, ETC). This type of coverage is better known as property coverage. A Renters Policy will also pay out if you are responsible for the accidental harm to other people or their property. The more formal name for that type of protection is known as Liability coverage.
Why should I Buy Renters Insurance?
Through my experience, I have often heard renters who lost some or all of their possessions as the result of an apartment fire or theft erroneously say, “I thought the landlord was responsible for my lost or damaged possessions”. Much to their dismay, they soon found out that the landlord had absolutely no liability for a tenants damaged or lost possessions.
What is covered?
- Your Personal Property—Likely items covered include but are not limited to your TV, stereo, furniture, clothing, cooking utensils, etc.
- Lodging— Most Renters Insurance policies will cover you for additional living expenses that are the result of a related loss. For example, if your apartment is damaged due to a fire or covered disaster, your Renters Policy will cover the cost of a hotel, or a different temporary rental.
- Personal Liability—Very often a Renters Insurance policy will include some level of liability protection against lawsuits for injuries or property damage that you may have caused. A simple example of this type of coverage could be triggered by someone tripping over a rug in your home or apartment that was not tacked down properly. If the injured party filed a law suit, you could file a claim under your Renters Policy to cover the costs.
What is not covered?
A Renters Policy provides extensive coverage for most of your personal property and liability concerns, but it will not protect you from all risks. A Renters Policy will rarely, if ever, cover damage caused by:
- Floods (Protection against floods can be purchased through NFIP)
- Earthquakes ( Some companies provide an earthquake endorsement)
- Bed bugs and other pests
- Damage to your car ( You will need a car insurance policy)
- Your roommate’s possessions (Unless he or she is listed on the policy)
How much does it cost?
Renters Insurance like most other insurance contracts are based on a few variables. Those variables would include but are not limited to:
- Amount of property coverage—I suggest you take a quick inventory to determine the approximate value of your personal property (TV, Stereo, Clothing, Etc.). Jewelry is also considered personal property, but many Renters Insurance policies have a cap on the amount you can recover if jewelry is stolen. So I strongly suggest asking for a special policy or an endorsement to your base Renters Policy for your expensive jewelry.
- Liability Coverage—Today, a lot of Renters Policies are packaged to include at least $100,000 of liability protection. However, for just a few dollars more ($25.00 / year) you can purchase additional liability coverage.
- Additional coverage—If you own a collectable near and dear to your heart (coins, stamps, guns, art, etc.), you can purchase stated value coverage for those items.
- Credit Rating—In today’s economic climate, your credit rating does affect the cost of insurance.
- Where You Live—Location can and will have an effect on the cost of your renters insurance policy.
Based on information gathered at rentswift.com, the average cost of a Renters Insurance policy in the US today is between $15.00 and $20.00 per month or $180.00 and $240.00 per year.
Where can I buy Renters Insurance?
Renters Insurance can be purchased online, through an agent or directly from a company. The carriers listed below represent a small cross section of carriers that offer a renters insurance policy in the US.
4 State Farm
6 American Family
7 Erie Insurance
8 Liberty Mutual
9 Farmers Insurance
Over the years, I have heard many reasons why people did not purchase a Renters Insurance Policy. Leading the pack was the misconception that the landlord was responsible for any damage to a tenant’s personal property, to the misnomer that it was just too expensive. I hope this article made it clear that you, and only you, are responsible for your personal property. Regarding cost, Renters Insurance is one of the most affordable insurance contracts available.
So what are you waiting for? Now is as good of a time as any, to remove the purchase of Renters Insurance from your things to do list.
I look forward to reading your comments and don’t forget to share this article with friends and family.