Why you should say “yes” to buying renter’s insurance
If you rent an apartment or house, it’s easy to think you don’t need insurance like you would if you owned the place. However, what would happen if your belongings were damaged or destroyed by a storm or fire? Would you have the money to replace lost items?
What if you are responsible for an accident that results in damage to someone else’s property? Would you be able to handle attorney’s fees, court costs, and possible damages if someone sues you? These are some of the circumstances can be covered by renter’s insurance, among other reasons why it’s important.
Why you need renter’s insurance
As a renter, it’s easy to assume you’re covered under your landlord’s policy, but this is not usually the case. The landlord’s property insurance only covers the building and their responsibilities are limited to repair or replacement of certain items. It won’t cover your personal property, including your clothes, furniture, computers, and electronics. It’s also easy to underestimate the value of your belongings, thinking it would be no big deal to replace them. You might want to think again. Even if you don’t own much, the expense of buying new items can quickly add up to thousands of dollars.
Liability protection is also important. As US News and World Report puts it, “Most renter’s insurance comes standard with liability coverage. So, if your dog bites someone or if you accidentally start a fire that damages an adjoining apartment, your insurance may insulate you from legal action and damages.”
What does renter’s insurance cover?
A typical insurance policy offers protection against a range of things and may include:
- Damage caused by aircraft
- Damage caused by vehicles
- Explosions
- Falling objects
- Fire or lightning
- Riot or civil commotion
- Smoke
- Theft
- Vandalism or malicious mischief
- Volcanic eruption
- Weight of ice, snow or sleet
- Windstorm or hail
- Damage from water or steam from sources including household appliances, plumbing, heating, air conditioning, or fire-protective sprinkler systems
It should be noted that renter’s policies generally do not cover flood or earthquake damage (most homeowner’s policies don’t either). You’ll need a rider attached to an existing policy in these circumstances.
Renter’s insurance is not expensive
Renter’s insurance is actually very affordable. The amount you pay will be based on how much coverage you need (or how much it might cost to replace damaged property). Statistics compiled by the Insurance Information Institute state that the average renter’s policy is less than $200 a year.
Some landlords now require tenants to carry renter’s insurance
In some cases, landlords require all tenants to buy renter’s insurance, whether it’s an apartment or a house. They’ll also want to see proof of a policy. “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 have covered themselves, some responsibility can be shifted away from the landlord,” explains Investopedia.
Pay attention to the kind of coverage offered in the policy
Beyond the amount of coverage you need, you’ll need to pay attention to whether the policy offers replacement cost coverage (RCC) or actual cash value (ACV). Which one your policy offers could affect the amount of money you get to replace damaged items. RCC will replace items based on current market rates, while ACV will only reimburse you for what the item is worth (its value) today. It’s sort of like getting paid for your used vehicle based on its current value.
Renter’s insurance is a smart, affordable investment that will allow you to replace your personal property if your apartment building or rental home ever sustains damage or your possessions are otherwise lost. Talk to an insurance agent today to discuss your needs and the amount of coverage you may require.
At NICRIS Insurance, we’re dedicated to the best service in Auto, Home, Life, and Retirement options. Your individual circumstances are unique and so are the kinds of coverage and preventative solutions that will help keep you safe. To reach us, call (516) 544-0006 or visit our contact page.