If you’re like me and you rent your house or apartment, renters insurance is something that can provide a lot of protection.
It’s not the most exciting topic in the world, but it’s an important piece of building your family’s financial security. And it’s also cheap, so you don’t have to worry about busting your budget to get it.
So today I’d like to go over the basics of renters insurance so that you know what it is, what it covers, and whether it’s right for you.
First off, it’s cheap and easy to get
The best news about renters insurance is that it is NOT likely to put a big dent in your budget.
I currently pay $236.38 per year for my policy, which comes to just about $19 per month. That includes $300,000 of liability coverage (which we’ll talk about more below) and even a special add-on to cover my wife’s engagement ring.
Now, because I live in a flood zone and renters insurance doesn’t cover you in the case of a flood, I do have to purchase a separate flood insurance policy that costs me an extra $168 per year. Most people won’t have that extra cost, but even with it the total cost is still only $33 per month.
The other good news is that renters insurance is easy to get. You can simply call up the company you have your auto insurance with and let them know you want to add a renters policy. They will ask you a few questions about your home, but it’s generally a quick and painless process.
What does renters insurance cover?
Here’s a rundown of the things that your renters insurance will cover:
Your landlord will have his own insurance that covers any structural damage to the building you live in, but it won’t cover your personal property. That’s where renters insurance comes in.
Renters insurance would cover you in case something happened to your house that damaged the things you own. Things like furniture, electronics, clothes and books would all be covered.
A good way to decide how much coverage you need, and to make your life easier if you ever do actually have a claim, is to make a list of the things you own and their approximate value. This is something I actually need to do myself (I need to stop slacking!). Here’s a resource to help you do it.
Certain types of property, like jewelry, may have limits on their coverage and would require a special add-on to make sure their fully covered. That’s why we have the add-on for my wife’s engagement ring.
Also keep in mind that there may be exceptions for certain types of damage (like flooding mentioned above), so just ask your insurance company about that. If you’re at high-risk for something that isn’t covered, you may be able to find additional insurance elsewhere.
Liability insurance covers you in case you accidentally injure someone or damage their property. In the case of renters insurance, it would also cover you in the case that someone injured themselves on your property, even if you weren’t involved.
This is one of those things that’s unlikely to occur but could come at a huge cost if it did, which makes it a perfect fit for insurance.
If you want to get an umbrella policy for even more liability coverage (a good idea in many cases), the insurance company will require you to have a certain amount of liability coverage on your renters insurance. Even more incentive!
Your living costs if you temporarily need to stay elsewhere
If your rental is damaged to the point that you can’t live in it for a period of time, your renters insurance will cover the cost of living somewhere else in the meantime. This could be a life-saver if you ever had the need.
Renters insurance is pretty simple. For a low cost, you get to cover your personal property in the case of theft, fire or other damage, and you also get a bunch of personal liability protection. Your insurance might even put you up in a hotel if your home is damaged!
So what do you think? Is renters insurance something you would like to get?