Is renters insurance worth it?

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Is renters insurance worth it?Lots of insurance is mandatory these days: Homeowners insurance is required for anyone who doesn’t own their home free and clear, drivers in most states have to have some form of car insurance and pretty soon we’ll all have to carry some kind of health insurance or pay a fine because of the Affordable Care Act.

But renters are still free to skip renters insurance and the monthly premiums that go with it — and most do. According to a recent poll, only 34 percent of renters in the United States carry insurance.

But if so many choose to go without, is renters insurance worth it?

“This is something every renter needs to weigh, based on their own individual factors,” says Tully Lehman, a spokesman for the Insurance Information Network of California, a consumer education group made up of insurers and trade organizations.

For those who want insurance, cost shouldn’t be a huge obstacle. Because renters insurance doesn’t cover a building structure, it’s obviously less expensive than homeowners insurance. But Lehman points out that, even with the low premium, the coverage includes a lot of stuff.

For starters, renters insurance can cover theft, even outside your home.

“Did you know if you have a laptop, for example, in your car, and it is stolen from the car, it is the renters insurance policy that covers the loss, not auto insurance?” Lehman says.

It can also cover damage from some kind of maintenance issue in the apartment. If, say, a water pipe breaks in your apartment, renters insurance covers the damage this might cause to your belongings. Lehman adds that renters insurance can also cover liability if someone gets hurt in your apartment and decides to sue you for the medical expenses. Good to know if you’ve got a not-so-friendly dog with sharp teeth.

But wait, there’s more.

“(Renters insurance) covers something referred to as ALE, or Additional Living Expenses, should a fire or other calamity require you to live elsewhere,” Lehman says. “If, for example, an apartment is damaged in a fire and your rent was $1,000 a month but you had to live elsewhere that costs $1,100 a month, it would cover the extra $100 for rent up to the policy limits.”

ALE would also cover food, living and clothing costs if you have to leave your home for more than 72 hours during one of these calamities.

Most renters insurance policies are under twenty bucks a month; mine is $18, plus I get a multipolicy discount on my car insurance.  I think that’s a decent deal for so much coverage.

So why don’t most renters carry it?

“(There’s) the belief that since they live in an apartment, they probably don’t have that much to insure,” says Lehman.

But that complete collection of Garbage Pail Kid cards might be worth more than you think. And did you count all those Blu-ray discs? What about that old guitar you’ve got hiding under the bed?

Is renters insurance worth it if it protects your very important Garbage Pail Kids collection?

“When you take some time to add up what you do have squirreled away in boxes, out of the way closet shelves, shoved under the bed and such, you will likely realize you have more belongings than you think.”

In fact, IINC conducted a home inventory test and asked a couple to identify all of their belongings in a room. Turns out, they forgot to include over $1,000 of stuff.

“Computers, software, stereo and television items and, yes, even your clothes add up quickly,” says Lehman.

Fellow renters, do you have insurance? Why or why not?

{ 9 comments, please add your thoughts now! }

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9 Responses to “Is renters insurance worth it?”

  1. Lesley says:

    I had homeowners, and now, since I rent (love the freedom of this now) I have renters. I have much of the stuff I had in my house and it was valuable then, as it is now. Seems kind of irresponsible not to have it – and it’s cheap. Thanks for the heads up re liability. I have that and didn’t even know it came with the policy. Now, I’m really glad I have it. Costs about $17/month.

    • Kristin Wong says:

      I didn’t really think about renters insurance until a friend of mine was robbed and he told me his insurance replaced everything. I’ve had it since then, but I was also surprised to find out just how much more it covers!

  2. Huskervball says:

    We had a killer tornado. Many apartment buildings were demolished. The importance of renters insurance was overwhelmingly clear.

  3. Ann says:

    Everyone that rents should have this insurance. This is one of the least expensive kinds of insurance. I had an apartment fire many years ago. Fortunately, I had just bought renter’s insurance. It covered replacement of things that were lost, cleaning and packing of all items that were salvageable. Also, I received money to rent another place while the apartment was being fixed.

  4. I never had it while renting, mostly due out of ignorance and poor decision making. But now we urge our renters to get it, as we explain our homeowners’ policy will not cover their losses.

  5. bloodbath says:

    It’s worth it in my city where we get lots of rain and have lots of old trees. No a week goes by where a tree does not fall on a house. The homeowners insurance won’t cover the tenants possessions

  6. Tommy Z says:

    I rented from two different places before buying my own home and I had renters insurance. I never needed to use the insurance, but it was well worth the money spent – especially because its so ridiculously cheap. Now that I’m a landlord, I encourage my tenants to buy insurance. Most recent tenant decided to not buy it and the house was broken into and all her valuables were stolen. I encouraged her to buy the insurance. She didn’t. Six months later, the same thing happened. I don’t understand why she won’t ever learn!

    Look at it this way, insurance on my $110k home (with about a $200k replacement value) runs around $700/mo (rates went up 30% vs. last year). If I was just a renter in my current house, that policy would cost me around $120. The vast majority of my home owner’s insurance is really covering my bank, not me. If the house burns down to the ground and it wasn’t insured, I’d just mail in the keys. At least with renters insurance, 100% of the cost of the policy is to insure YOU and not the BANK.

  7. Dan Long says:

    Increasingly, landlords are requiring that tenants evidence a renters insurance policy under the terms of the rental agreement.

    A lack of understanding as to the policy and coverage is one reason many renters fail to take up insurance. In addition to broad protection for the renters personal property, the liability insurance component of a standard policy is invaluable. The example of the injured apartment visitor being covered by liability insurance is often cited. So let’s offer another liability scenario – one that might help the undecided over the merits of renters insurance: As a renter, if you are determined (found by investigation) to have been negligent in causing an accidental fire that destroys much or perhaps all of the building you live in, then you could be pursued for substantial damages – even though the landlord carried insurance on the building. Liability insurance can protect you against this risk. While relevant to all renters, those renting private homes might be especially interested.

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