No one really sits around thinking about what kind of insurance is lacking in their lives. But if you're renting your home, whether it's an apartment or house, consider getting renters insurance.
Based on the average cost from the National Insurance Commission, the average yearly cost comes out to about $180. That's a pretty small price to pay if the worst were to happen and all of your stuff was destroyed in one fell swoop.
Despite the inexpensive amount, only 40 percent of renters said they carry insurance, according to a study by the Insurance Information Institute.
Even if you don't think you have a lot of expensive items, having to replace everything you own adds up and can be expensive. According to Esurance, the average person has about $20,000 worth of stuff.
Before you purchase renters insurance, be sure to find out more about it and what it covers. Here's what you need to know about the best renters insurance.
Renters insurance protects renters in the case of lost, damaged or stolen items within your personal property and possessions. It also covers you in case someone is injured while on your property. If this injured person decided to sue you due to the injury on your property, you could use renters insurance to help cover that cost. Otherwise, it would be your responsibility to pay that amount out-of-pocket.
Fabio Faschi, property and casualty team lead at Policygenius explains:
“If you're a renter and you don't want to be held financially responsible for things like replacing your flat screen TV after a break-in, paying for doctors visits if someone is hurt in your home, or footing the bill for a hotel room if your rental catches fire, you may want to consider renters insurance."
Renters insurance covers what your landlord's insurance won't.
Basically, that $20,000 worth of belongings wouldn't be covered by your landlord's insurance if there were a disaster. You'd need to replace things like your TV, computer, furniture, clothing and kitchen items.
Even if you could afford to buy back all of your things if there was a disaster, there are better ways to spend that money.
The best renters insurance covers property damage from all sorts of disasters, like:
But it doesn't stop there.
You may not realize that renters insurance protects you against more than just natural disasters and theft.
Renters insurance also protects you if you damage someone else's property — for instance, if you break a neighbor's window while playing softball.
It's slightly ironic, but if money is tight for you right now, it's more of a reason to get renters insurance. That $15 a month could potentially save you a lot down the road.
There are ways to make it work by scaling back on other expenses. Consider canceling your Spotify and Netflix accounts or take fewer Ubers each month.
John Peters, chief insurance officer at Lemonade says:
“Coverage for your monthly cost of renters insurance can be as low as your morning cup of Joe. It would be the smart thing to invest that same dollar amount for something much greater than a single caffeine rush. Renters insurance is there to make you feel safe and calm so you focus on your experiences, not your things."
Your premium depends on a number of factors, including:
There is a minimum to premium coverage you can choose from, and you can also find a wide variety of companies that offer renters insurance.
If you do a quick Google search, you'll find companies that give you quotes, based on how much coverage you want and how much your things are worth.
To give you an idea of roughly how much renters insurance would cost, take a look at the following example.
Monthly cost (prices may vary):
Your landlord's insurance covers what they own: Namely, the building. If something happened and everything in your apartment was destroyed, your stuff wouldn't be covered by the landlord's insurance (unless the damage was caused by problems that you reported and they ignored).
You wouldn't be able to make a claim for your goods on your landlord's insurance, but you'd be covered if you had your own renters policy.
If your building was under repair for damage and you had to live elsewhere, temporarily, your landlord's insurance wouldn't pay for that. However, renters insurance would.
Most renters insurance won't cover damage from earthquakes or floods. (If you live in areas that are prone to both of these natural disasters, you should specifically find out if you're covered. If not, you'll have to pay for any repairs or damages if you happen to incur any losses due to either disaster.
Flood insurance is also a separate policy that may not be covered from renters insurance. You could potentially purchase earthquake and flood insurance separately as a rider to your insurance policy.
Of course, the answer here is yes. If you rent, getting renters insurance is almost always worth it. It's affordable and will protect you against unforeseen damage to your property and even legal responsibilities.
If you need more reasons, here are three more.
One of the nicest perks of renters insurance is that your belongings don't have to be in your apartment in order to be covered.
Do you take your bike to work? If someone stole it from your workplace, it would still be covered.
Do you have storage space? If it were flooded, your damaged goods would be covered under the terms of your policy. Your insured items are covered even when you take them out of your apartment.
If your apartment were damaged and you had to live elsewhere while repairs were made, renters insurance would cover those costs, too. If there were a fire that caused smoke damage or a pest issue that required fumigation, for example, your coverage would likely pay for a hotel room and meals.
The best renters insurance can also help you protect your identity. If credit cards or other personal information are stolen, your insurance provider can work with banks and credit bureaus to help clear your name and recover your money. Even your legal fees could be covered.
In your hunt for the best renters insurance policy, just follow this simple process:
Figure out how much coverage you want. Many companies have online calculators to help you figure out the amount of coverage that's best suited for you. For example, Allstate has an online tool you can use called What's Your Stuff Worth?
Shop around and get a minimum of three quotes. Then find out if your auto insurance company offers a discount if you add renters insurance. When you find the best fit for you, sign up and take the worry off your shoulders.