Have you ever heard of renter’s insurance? Do you need it? An important part of finding financial freedom is understanding how to best protect your assets. Let’s learn a little more about renter’s insurance so that you can make an informed decision about whether or not you need a policy.
What is renter’s insurance?
For those that own homes, homeowners insurance, usually required when you get a mortgage, covers both the structure of their home and their possessions inside. If you rent you don’t have this protection. Many renters make the mistake of assuming that their belongings are covered under their landlord’s insurance policy. This is not true. Without a renter’s insurance policy you will be left with nothing if your apartment complex burns down or if your possessions are stolen, damaged in a flood or destroyed. In fact if you have visitors and someone gets hurt in your home you can even be responsible for their injuries without a renter’s insurance policy. Whether you rent a house, condo, apartment, townhome or even a room, you should seriously consider renter’s insurance to protect your belongings.
Do I need renter’s insurance?
Many renters assume that the value of their items don’t make a policy worth the investment. This is generally not true. Take a few minutes to write down a list of all of your possessions. How much would it cost you to replace your wardrobe? What about your home theater system? Do you have any jewelry or other high price tag items? Even if you only have the bare necessities you might find that it will cost thousands to replace them. Plus you won’t have to worry about being covered in cases of accidental injury of others while they are in your home.
How much will it cost?
You may think that renter’s insurance will be really expensive, but in most cases it is surprisingly affordable. In fact you can probably find a policy for somewhere between $15 and $30 each month. Your exact premium will vary based on your location, the type of coverage you choose, how much coverage you purchase and your deductable. Don’t decide that it isn’t affordable without first getting a quote. You need to have all the information to make an informed decision.
Are there any ways to save?
Of course you are probably wondering if there are any ways to get your renter’s insurance for less. One of the best ways is to group policies. For example if you have an auto insurance policy already you might want to check and see if they offer renters insurance as well. The more policies you group the more you can save. So if you have auto or life insurance policies with companies that offer group coverage you may end up getting a discount.
What should I know before getting a policy?
It is important to know exactly what you are getting into before you make a purchase. Insurance policies can vary a lot and if you don’t know which questions to ask you might end up getting a policy that won’t protect you in some situations. Here are a few important questions to ask before you sign any policies.
- What is covered?- Find out exactly what is covered in your home as well as what situations you are covered in. Ask questions like, “Am I covered in a flood, fire, burglary, etc?” to make sure that you are covered in every situation.
- What will it cost?- Find out your monthly or yearly premium inclusive of any fees. Some companies charge a fee if you want to pay monthly or if you cancel your policy before your contract period ends.
- What will I pay out of pocket should I need to use my coverage? Find out what you will have to spend for your coverage to kick in.
- Do you offer any discounts?- They will probably say no, but it never hurts to ask.
Make sure that you compare rates and policies and that you choose a reputable company. When shopping for insurance you don’t want to go with a company that you don’t trust. It is always a good idea to check your potential companies through the Better Business Bureau.
While renter’s insurance might not be right for everyone, it is a good thing to have in most situations. It is a relatively affordable way to protect yourself. Think about it- would you be able to replace everything tomorrow without going into debt? Probably not. Renter’s insurance will help you stick to your financial goals should disaster strike.