Is Renter’s Insurance Worth It?
Many renters mistakenly assume that their landlord is insuring them. But they aren’t. So if the home you rent was to burn down, how would you replace your stuff? It would help if you had renter’s insurance.
When you move into an apartment or rented home, you put the utilities in your name, unpack and begin a new phase of your life in a new place. But one thing many people neglect to do is get renter’s insurance. Because it isn’t usually a requirement, they never even think about it. This can be a significant mistake.
What Your Landlord’s Insurance Covers
Many renters mistakenly assume that their landlord is insuring them. This isn’t the case. The landlord has insurance that covers the structure of the rental property. So if the apartment building or home you rent was to burn down, the landlord could pay to rebuild since the structure is insured. But what about your stuff? Your laptop, your clothing, everything you own is burned up, and you don’t have insurance coverage for it.
Don’t Think You Own Much?
Sit down and look around your home. Then, start making a list of what you own and how much it would cost if you had to go out tomorrow and replace everything: your laptop, your tv, clothing, dishes, vacuum cleaner, makeup, food, small household appliances like blenders. The list ends up getting long. What you own would cost an awful lot to replace if you were robbed or disaster struck your home. And the only way you could replace it all is with a replacement value renter’s policy.
Replacement vs. Actual Cash Value
When purchasing renter’s insurance, you will want to buy a policy that offers replacement costs. The alternative is “actual cash value.” What’s the difference? Imagine you have a sofa from 1994 that was destroyed in a fire that occurred in your apartment building.
- If you have replacement value insurance, you will be reimbursed for the amount it will cost you to replace the sofa today. That could be $1,200.
- If you have an actual cash value policy, you will only receive the amount of money your 1994 sofa was worth before it was destroyed. That might be $50. You will have to pay for the difference out of your pocket.
What’s Not Covered
Insurance claims arising from natural disasters tend to be total losses, so insurers are reluctant to cover most of them, in particular:
- Hurricanes
- Floods*
- Earthquakes
- Sinkholes
- Mudslides or landslides
*It is important to note that flooding due to plumbing issues is usually covered.
Infestations are not covered. And if you have a roommate, their belongings aren’t covered, either. They would have to retain their own renter’s policy.
What Kind of Personal Property Damage is Typically Covered?
Although most natural disasters aren’t covered, some are. And there are plenty of claims that stem from other sources. Including:
- The weight of ice, snow, or sleet
- Windstorm or hail
- Volcanic eruption
- Fire or lightning
- Smoke
- Explosion
- Riot or civil disobedience
- Vandalism
- Theft
- Damage caused by aircraft
- Damage caused by vehicles
- Damage caused by a falling object
- Accidental discharge of water or steam from specific household systems or appliances
- Freezing of specific household systems or appliances
- Sudden, accidental tearing apart, cracking, burning, or bulging of specific household systems
- Sudden, accidental damage from artificially generated electric currents
What Else Does Renter’s Insurance Cover?
If you are displaced during repairs, renter’s policies usually cover your hotel expenses.
It also includes liability insurance in case you are sued for negligence because, for instance, someone slips and falls on the property where you live.
Medical bills for anyone injured in your home are also often covered.
Some policies have a rider that covers expenses that arise from identity theft.
Property that is stolen or damaged when you are away from home is often covered. For example, your laptop is stolen from your hotel room while on vacation. Or perhaps your bike is stolen outside the coffee shop you stopped at on the way to work. Of course, there are some limits, and a detectable will apply, but it is good to remember.
How Much Does a Renter’s Policy Cost?
Renter’s insurance is usually relatively inexpensive, particularly if you bundle it with your auto policy and get a discount. However, the actual cost of your policy will depend on several factors, including the value of your belongings, whether you choose a replacement or true cash value, and even your location.
The best thing to do is sit down with a trusted independent insurance agent and let them help you choose the policy that is best for your needs. Families like yours have trusted Hermann Insurance for over 50 years! Contact us or call us today at 651-674-4472
