To buy or not to buy renters insurance is more than just a question – it’s a choice that might soon be made for you. The debate for many uninsured renters for having or not having it is that renters insurance is too costly, they don’t have much stuff so why bother or they were born under a lucky sign and nothing bad ever happens to them. Regardless of your reason, your landlord may be about to make the decision for you.
As numbers go, in a 2006 Insurance Research Council poll it was found that, while 96 percent of homeowners have homeowners insurance, less than half of renters have a renters insurance policy. Much of this discrepancy is attributed to the fact that many renters incorrectly assume that their landlord’s insurance policy will cover their belongings in the event of a fire or that renters insurance is simply too expensive.
However, according to Loretta Worters, vice president of the Insurance Information Institute, an increasing number of landlords are now requiring their tenants to buy their own renters insurance policy. Depending on where you live, how much stuff you have, and if you bundle with your auto insurance, a typical renters policy runs around $250 to $300 a year.
Bad things can happen even if you were born under a lucky sign – and often it’s when you’re at work or on vacation. Imagine being away on a three-day trip to Cabo – only to get a text or call that your apartment building is on fire and you don’t have renters insurance coverage. Everything you own could be gone.
Or, what if someone breaks into your apartment or your car and walks away with a bunch of your valuables, electronics, or laptop? Same scenario – you’re out of luck. Any replacement, if some of the items are replaceable, will come straight out of your pocket – and, that’s a shame, especially when you consider that for a few bucks a month you could have your insurance company take care of the mess.
When looking for renters insurance, keep in mind that there’s an important distinction between policies that cover replacement cost and actual cash value. The difference is this – replacing a 10-year-old couch would cost more than the couch is actually worth because of wear and tear over the past decade. Meanwhile, renters with expensive personal property like fine art, antiques or jewelry may want to buy an insurance rider, as regular policies are subject to limits.
Aside from the replacement of your belongings in the event of a fire or theft (flood damage is typically not covered by homeowners or renters insurance), renters insurance has the advantage of a liability component. This is a very important part of the policy as it protects you and your family against any lawsuits for bodily injury by you or even your dog if it was to bite someone.
Furthermore, renters insurance policies may also cover additional living expenses. Regardless of you abundance or lack of things, if your apartment is damaged to the point that you have no place to live, additional living expenses will pay for hotel bills, temporary rentals, restaurant meals, and any other expenses you incur while your home is being repaired or rebuilt.
So, act today while the choice of having renters insurance is still up to you and not your landlord. That way you can be sure of getting the best renters insurance rates available.