We’re all pursuing our version of the American Dream, and for many of us, owning our own home is one aspect of that dream. But the fact is that many of us rent, whether by choice or sheer necessity.
With home ownership at its lowest point since the 1960s, renting is definitely on the rise. An ever-increasing cost-of-living rate, the overpriced housing market, student loan crisis, and tightened lending standards have made renting the new normal.
And renting does have its perks.
Renting gives you more free time, is more short-term budget friendly, doesn’t put you into debt, and generally allows you to have a shorter commute to work. Plus, many rentals include utilities and other monthly fees, and you don’t have the stress of maintenance, repairs, and lawn care.
But these perks don’t eliminate all of your responsibilities! Specifically, I’m talking about renters insurance.
It seems that only 40% of renters have insurance policies. Compare that to 95% of homeowners. This causes me to ask:
This is the easiest misunderstanding to clear up. This lie is keeping too many people from enjoying the benefits of insurance coverage. Unlike your health and car insurance, renters insurance is very affordable.
The average cost of renters insurance is around $15 a month!
Fifteen dollars. That’s a couple of quarters a day.
For this nominal fee, the average policy with a $1,000 deductible includes personal belongings coverage of $40,000 and personal liability of $100,000. Of course, you can adjust the amounts and the deductible to suit your needs and budget.
Renters insurance is readily available and can usually be bundled with your car insurance, reducing the cost even more.
Would you like to see how much renters insurance would be for you? Check out Lemonade Renters Insurance. They reverse the traditional insurance model by take a flat fee and give back what’s left to causes you care about.
Thinking you “don’t have enough stuff” is a common reason many people don’t buy renters insurance.
If you think your apartment contents aren’t worth enough to warrant insurance, you probably haven’t taken a thorough inventory. Insurance experts suggest you put a value on all your belongings, room by room, piece by piece.
Don’t just consider big-ticket items like furniture and electronics. Add up the value of your wardrobe, dishes and kitchen contents (including food), books, linens, toiletries, photo albums, toys, bicycles, sports equipment, etc.
The average 2-bedroom apartment contains more than $30,000 in personal belongings.
In the event of a disaster, the cost of replacing even basic living supplies adds up quickly. Should you encounter a fire or water leak, weather-related damage from wind or lightning, vandalism or theft, your own renter’s insurance policy will keep you protected.
You might be surprised to learn that your possessions are not covered under your landlord’s homeowners policy.
Your landlord’s policy protects the building itself and liability in the case of a property-related injury. It does not, however, cover any of the tenants’ contents.
This comes down to even small things. For example, if an appliance or faulty plumbing causes smoke or water damage to your items, the landlord’s policy covers the repair of the appliance or plumbing, but not the damage to your property. If the refrigerator breaks down and you lose a couple hundred dollars’ worth of food, your landlord is not liable.
Covering the personal contents of your rental property is just one of several things your renter’s insurance will do.
I think it’s fair to say that most people understand renters insurance is designed to replace the items in your apartment or rental home in the case of a theft or fire or some other type of disaster.
I think it’s also fair to say that most people have no idea that renters insurance also provides you coverage for several other scenarios.
This is a good place to note that renters insurance does not cover everything. Expensive items, such as engagements rings, may need extra protection policies. And be forewarned that flood insurance is only available through the federal government and is never included in homeowners or renters insurance.
Renters insurance is absolutely worth the cost!
For a very reasonable price, having this insurance can protect you in the case of an emergency or catastrophe.
Decide how much insurance you need with a thorough inventory, and when purchase a policy with the coverage necessary to replace all of your belongings. Get quotes from several companies, including your current car insurance company.
Not having this insurance means you will have to replace everything on your own. And your renter’s policy will provide you with about $40,000 in personal property replacement and up to $100,000 in liability costs. These benefits far outweigh the $180 yearly cost of the insurance.
Whether you are struggling to make ends meet or you can afford to replace everything out of pocket, renters insurance is well worth the cost (get a free quote from Lemonade Renters Insurance, the insurance company that gives back).
As someone who works in the insurance company, the benefits from getting renters insurance outweigh the cost, which is not that high if you’re looking at the benefits.
Mandatory I would say, especially if you live in a hurricane prone or coastal area.
Great post!
I pay only $23.00 a month for my policy through geico. As much as I have wanted to use that $23.00 for paying off our debt I have continued our policy. I rather have it just in case and have that cushion instead of having to keep 50K aside (which we don’t have) if something happens.
wow great article!
I didn’t get renters insurance until my first apartment out of college and I am so glad I did! My roommate and I covered $25,000 coverage for $15/month. During our 4th month, the apartment next to ours had renovations and a fire started. We didn’t have fire damage, but smoke and water damage. Insurance covered everything lost plus hotel costs while we were homeless. Our total bill came to just over $24,000. Cleaning bill alone was $18,000. Don’t underestimate the value of insurance nor the value of your property!
Yes, renters insurance is worth it. I have renters insurance. It covered the furniture stolen from my storage unit. You never know what can happen.