Are you a renter? If so, you are certainly not alone. The growth of renters has outpaced homeowners in large U.S. cities, including our very own “Beantown.” In fact, Pew Research Center estimates that there are over 43 million renters nationwide. That number has ballooned since the housing bust of the 1990’s. If you are a renter, chances are you are saving to buy a house or have just recently downsized from a home after your children have flown the coop. Renting for many, therefore, is a smart financial move. Unfortunately, many renters do not understand the importance of having renter’s insurance. It is one of the most valuable and overlooked pieces of financial protections that renters can obtain.
What is Renter’s Insurance?
Renter’s insurance is an insurance policy that provides coverage for lost, damaged, or stolen personal possessions in your rental property. It also provides liability coverage for injuries to another person that might occur in your rented home or apartment. This insurance policy is important because in the event of a fire, flood, or other disaster, your landlord’s insurance does not cover your possessions. Landlord insurance also does not cover guests who have been injured on the property or temporary accommodations in the case of an event that causes the apartment to be unlivable.
What Does Renter’s Insurance Cover?
The first question we often get from renters investigating this type of insurance is, “What does the insurance cover?” Followed quickly by, “Do I really need it?”
In short, a comprehensive renter’s insurance policy will cover the cost to replace your personal belongings. Look around at your apartment and consider what it would take to purchase a new laptop, furniture, wardrobe, your phone, electronics, and any appliances you had to buy for the space (refrigerator, washer, dryer, etc.). While it may not seem like a lot, in the end a few dollars a month to protect those items could mean the difference between being able to replace items and doing without for a while.
Another part of renter’s insurance is the liability coverage that can be invaluable in the case that someone is injured on your property. If someone slips, falls, or is hurt on the premises, or if your overzealous dog or cat bites a visitor and sends them to the emergency room, you will be covered for their medical or legal expenses (should a legal suit occur.) You may think that your friends would never sue you, but if they are facing mounting medical bills, they may have no option but to look for a way take protection from the bills.
In addition to covering possessions and providing liability coverage, renter’s insurance also covers temporary living expenses should your apartment suffer damage from a flood, smoke, or fire. This loss-of-use-coverage can mean a safe place to recover from the event where you can sort things out and still have a place to live.
As an added bonus, renter’s insurance also covers your valuables outside your apartment. Say, for example, that your laptop is stolen while you are on vacation, your renter’s insurance may cover this as well.
Is Renter’s Insurance Necessary?
In reality, you are the only one who can really answer this question. While renter’s insurance is not required by law, some landlords do ask that their tenants have coverage.
Ask yourself whether you can afford to replace all of your possessions that probably took you years to buy? Then ask yourself if you can afford to pay medical bills or legal fees if someone is injured at your apartment, whether or not you are at fault. The great thing about renter’s insurance is that it is fairly economical given what it covers. The few dollars a month could save you a gigantic headache in the case of a natural disaster, theft, or injury. It’s up to you to decide.
If you want to know more about renter’s insurance, call Phil Richard Insurance to talk to one of our specialists. We can help you understand exactly what is covered and what is not. Call us at 978-774-4338, or contact us through our website with questions.