Unless you have a mortgage on the place where you are currently living, then you are very likely renting it. Since the mortgage crisis, it has become more common for people to choose to rent instead of purchasing a home. Other people are renting because they are only intend on staying somewhere temporarily. Either way, it can be very advantageous to get renters insurance.
Some people have the mistaken belief that since they do not actually own the place where they live, that there is no need for them to get insurance. After all, the landlord owns the home, so he or she will be responsible for getting homeowners insurance. If the building burns down, or floods, then it’s up to the landlord’s insurance policy to take care of it. If the plumbing breaks, or the drywall becomes infested with mold, well, that’s up to the landlord to fix as well. Most people assume that these facts mean that you, the renter, do not have any responsibilities when it comes to insurance. This misconception can turn out to be a very expensive one.
Renters insurance provides you with protection for your property. While it is true that you don’t own the home or apartment that you are are currently living in, you do own most of the things that are inside the place that you are renting.
You probably own the furniture, unless you happen to be renting a furnished apartment. You own all the clothing, towels, bedding, and other personal items that are there. You most likely have a TV, and a computer, and other expensive electronic equipment. In many ways, your entire life is located inside where you live, no matter if you are renting it, or if you own it.
Think about how much it would cost to replace your property if it were stolen, or damaged. This is where renters insurance can help you. Part of what a renters insurance policy does is replace things that get lost or stolen. This means that you won’t end up having to come up with all of the money that you would need to replace things entirely out of your own pocket. The insurance company will either replace that item with one that is of comparable value today, or they will give you the cash value for what that exact item would be worth today. You should check to see whether the insurance company will offer you replacement cost coverage, or actual cash value. The two are not the same.
Insurance is a good way to be protected in case the unexpected happens. If the building catches fire, or if a pipe breaks and causes flooding damage, this could, potentially, damage your property. Your landlord’s homeowners insurance will not cover your personal property.
Another thing to consider is the possibility of theft. Someone could break into your apartment when you are not there. Some landlords enter their tenants apartments when the tenant is not at home in order to make repairs. You truly don’t have any way of knowing for certain who the landlord will bring with him, or how trustworthy that person may be. Renters insurance can replace property that was stolen from you.
Image by Eran Sandler on Flickr