Faced with ever-increasing rents, a lot of Americans living in rental homes and apartments opt to skip renters insurance. This can save you a few bucks every month, but if your property is ever stolen, lost or damaged, you may find yourself in hot soup without renters insurance. The following are 5 good reasons why you need to buy renters insurance:
1. To protect your personal property
A lot of people mistakenly believe that their personal property in their rental homes is protected under their landlord's property insurance. According to a survey by Nationwide, over 56% of renters don't own renters insurance even though 68% of them would need to spend over $5,000 to replace their property after damage, loss or theft.
A standard renters insurance policy provides the protection you need for your personal possessions against covered perils such as fire, theft, vandalism, and more. It is recommended to get a policy that provides replacement cost protection as opposed to actual cash value protection.
If you own expensive jewelry, art or collectibles, you may have to purchase an additional cover with a higher limit.
2. Liability protection
Accidents happen. Say one day a visiting friend slips and falls down your staircase and breaks their leg. Or your dog bites the neighbor's son, forcing them to spend money on medical expenses. In both cases, your guest or the neighbor can make a liability claim against your renters insurance policy and they will be compensated.
If the neighbor or guest decides to sue you, your renters insurance policy will cover your legal costs and payout as directed by the court.
3. Additional coverage for your property away from home
Depending on the type of policy you have, your renters insurance can provide coverage for your personal property in the event that it is stolen, lost or damaged while away from your home. For example, if you are using your laptop at a coffee shop and someone steals it, the "off-premise theft" clause in your renters insurance will cover you. However, many terms and conditions apply in this kind of situation so it's best to consult your insurance provider about it.
4. It's cheap
The monthly premium for renters insurance costs less than a pair of movie tickets, but it can save you tens of thousands of dollars loss if anything ever happens to your property in your rental home. On average, renters insurance costs between $15-$30 per month for $30,000-$50,000 coverage. You can even lower the cost further by buying your renters insurance from your auto insurance provider, being a non-smoker, installing smart security and fire prevention systems, or staying claim-free for a long period of time.
5. Greater choice of rental properties
When looking for apartments, you will realize that there are landlords who specifically require all tenants to own renters insurance. Without it, some landlords will not let you stay in their homes meaning you will have fewer options of where you can find a home to rent. With renters insurance, you have a better chance of getting the home you want.