You may think having insurance for the roof over your head and the belongings underneath it is only necessary once you become a homeowner…or if you’re lucky enough to own some valuable antiques or expensive jewelry. But the reality it, all renters should have insurance, no matter how small your place is or seemingly insignificant your possessions are. Here’s why.
Renter’s insurance provides an important level of coverage for items not covered by your landlord’s insurance. For example, while your landlord is responsible for taking care of expenses related to fixing structural problems – such as a leaking roof or faulty wiring – he or she is not responsible for repairing or replacing items damaged by those problems, like your television or sofa. Your landlord is also not responsible for expenses incurred should you have to live elsewhere while repair work is taking place in your apartment.
Renter’s insurance, however, will take care of expenses related to such scenarios and many more, such as water damage, fire and theft, as well as an array of random costs that can arise, such as running over your neighbor’s weed wacker or fixing the chandelier your son broke. What is and isn’t covered all depends on the type of renter’s insurance you choose to buy. Generally speaking, there are three types:
Personal property coverage: Will cover the cost to repair or replace any damaged or stolen clothing, furniture, valuables, electronics, etc.
Renter’s liability insurance: Helps cover the costs of repairing damages you make to someone else’s property, or if someone blames you for injuries sustained while at your place.
Additional living expenses: This will cover costs – such as hotel, transportation, and increased food and beverage needs – should you need to vacate your rental while it undergoes serious repairs.
While renter’s insurance will give you much-needed peace of mind and save you money in certain situations, there are some important caveats to note:
– Many renter’s policies won’t cover damages related to natural disasters, such as floods or tornadoes, especially if you live in an area that’s prone to such severe weather events. You may want to purchase additional coverage, such as flood insurance, if this is the case.
– In the case of theft, most policies will only cover a small portion of what’s stolen. So don’t plan on keeping a lot of cash at home. If you have something very expensive, such as a diamond necklace or antique watch, consider extra coverage.
– Some policies will pay for what it costs to replace an item, but some will only pay the original market value, even if the value has risen since you’ve bought it.
Source: Real Simple