Renters Insurance Myths

Many people believe they don’t need renters insurance — and granted, most people with this insurance won’t need to make a claim, but that’s true of most types of insurance. You don’t buy insurance because you know you’re going to need it, you buy it hoping that you never will. Renters insurance really is a necessity.

I don’t need renters insurance, because my landlord is covered

Think again—why would your landlord pay to cover your worldly possessions? Most of the time your landlord’s insurance only covers structural damage to the building they own. Your landlord’s insurance doesn’t cover damage or theft of your personal items, and in some cases, it may not even cover structural damage that you cause. If your building is damaged in a fire, your landlord’s insurance will pay for repairs, but it won’t replace any possessions you lose. And if you leave a tap running all night, and it causes water damage in your apartment, chances are you’re liable for paying for repairs.

My building is safe, so I don’t need renters insurance

Living in a safe building reduces your chances of having your belongings stolen, but it doesn’t eliminate them entirely. Renters’ insurance policies can cover you if items are stolen out of your car or stolen while you’re on vacation, cover medical expenses if someone injures themselves in your apartment, and may even compensate you for legal defense costs if they sue you. More to the point, fire, weather, and natural disasters don’t care how safe your building is. Water pipes can still freeze and burst in a safe building, and hail and wind can still break windows and potentially damage your possessions. Renters insurance can cover you against theft, vandalism, water damage, hail and windstorms, smoke and fire damage, and even damage caused by aircraft or vehicles. Some coverage, such as earthquake and flood, can be purchased separately.

I don’t own anything of value

Are you sure that’s true? Do you own a computer? Digital camera? Wii, iPhone, DVD player, or LCD television? The price of clothes, sporting equipment, books, CDs, small appliances, and electronics adds up, and if you have items such as jewelry, you’re looking at a decent chunk of money to replace everything.

Most policies cover electronic goods and equipment (including CDs, DVDs, and tapes), cameras and photography equipment, sports equipment, small appliances, furniture, glassware and china, clothing, and books. Items such as computers, jewelry, furs, watercraft, and firearms are also covered, but protection may be limited.

Renters insurance is too expensive

Renters insurance definitely isn’t out of reach for the average person. A basic policy for $15,000 to $25,000, with a $250 deductible, could cost you as little as $15 a month. Four dollars a week, and your personal possessions are covered against theft, vandalism, and most types of damage you’re likely to encounter. You can even reduce the costs of your renters insurance by insuring your autos with the same company.

Obviously, not everyone is going to want to pay for renters insurance. It is at least something to think about, though, when you consider the combined value of all of your personal property and the relatively low cost of renters insurance today.