I recently learned that my co-worker’s house was broken into, and she did not have renter’s insurance to protect her family’s possessions. The thieves stole cash, electronics, and other valuables from their apartment.
When she told me they didn’t have renter’s insurance, my immediate followup question was, “Why in the world not?”
Renter’s insurance is very cheap, and provides quite a bit of protection for your personal property and peace of mind. She said that she didn’t know how affordable it could be, and had never tried to purchase it. She simply assumed that her family would not be able to afford it on their meager budget.
This is just one of several myths that continue to circulate about renter’s insurance. These myths keep far too many people from protecting themselves, their families, and their belongings with this important insurance coverage.
Here are five myths about renter’s insurance that continue to circulate, but are simply not true.
Renter’s insurance is too expensive
When compared to other types of insurance policies, renter’s insurance provides some of the lowest total premium costs for the highest level of protection. For example, depending on your circumstances, you may be able to buy $100k or more in renter’s insurance coverage for as little as $25 or less per month.
Simply put, there is no reason you should risk a huge loss when you could protect yourself for so little.
My landlord’s insurance covers me
Your landlord’s insurance does not cover your personal possessions. His insurance simply covers the building’s structure, and will allow him to rebuild should it be destroyed by fire or natural disaster.
There is no provision in the landlord’s insurance policy for the tenant’s personal property. You need to acquire your own renter’s insurance to ensure that you are adequately protected from perils and catastrophes.
I don’t own enough to need insurance
Many renters don’t own a lot of personal property, and thus feel that they can get away without insurance. The problem is that far too many renters undervalue their personal property. Most people have spent years collecting things such as electronics, furniture, clothing, and other items.
When was the last time you conducted a home inventory of all your personal property? If you were to add all of your possessions up, you might be surprised by how much you could lose. It could quickly add up to more than you’d be able to replace on your own.
I don’t need liability coverage
Renters are not typically covered by their landlord’s liability insurance. Thus, if someone gets hurt inside your apartment, you could be on the hook. You landlord’s policy typically only extends to the common areas that are shared by all tenants such as pools, playgrounds, and other communal areas.
Having renter’s insurance could provide you with at least a small amount of liability coverage should someone get hurt because of your negligence. You can also supplement your renter’s insurance with additional umbrella insurance if you need more liability coverage.
Now that I have it, all my stuff is covered
There are several categories of items that are either not covered by renter’s insurance, or are only covered up to a certain value. Your renter’s insurance most likely has a limit for losses related to artwork, cash, electronics, furs, jewelry, guns, stamps, and other collectibles.
For example, many renters’ insurance policies have a $2,500 limit for jewelry. So, in many cases, a nice engagement ring and wedding band could quickly eclipse that coverage limit. In most cases, however, you can purchase additional coverage in the form of a low cost rider.
What about you?
If you’re a renter, do you have a renter’s insurance policy?
Ultimately, skimping on this sort of coverage could turn out to be one of the biggest money mistakes of your life. But guess what? You wouldn’t be alone.
According to a study by Allstate, nearly two-thirds of all apartment and condo renters lack renter’s insurance. At the same time, data from the Bureau of Justice Statistics shows that renters are 50% more likely to be the victims of theft as compared to homeowners.
The bottom line is that renters need to protect themselves with renter’s insurance just as much as homeowners need a homeowner’s policy.