When Renting A New Space,
Is Renter’s Insurance Worth It?
TLTR: This article looks provides some quick info and looks at the question: is renters insurance worth it? Whether you’re renting short-term or long-term, for business or living purposes, renter’s insurance provides you with the protection you need at an affordable price. At an average cost of around $300 annually, we think renter’s insurance is worth it.
According to Insurance Information Institute, the average renter owns $20,000 in personal property. Renter’s insurance helps protect that property from theft, vandalism, fire, as well as plumbing and electrical malfunctions. While it is required for all homeowners to buy a homeowners insurance policy, the average homeowner also owns a lot more than the average renter. This might make you as a renter wonder – do I even need this? Is renter’s insurance worth it?
In this blog
What makes renters insurance worth it?
1. Renter’s insurance will protect your belongings from risk.
While your landlord will take care of their property and the building you live in. If you’re lucky, they’ll send a plumber or an electrician over to take care of small inconveniences, but they are not obliged to do this. Often times, when things go wrong in your home, you’re on your own. Your apartment is like your own personal box and you are responsible for everything in that box.
2. Renter’s insurance is extremely inexpensive and also a great investment.
A recent quote by Forbes Advisor states the current average national cost of rental is $182 a year, for personal coverage that ranges between $26,000 and $31,999. At costs that low, it doesn’t make sense not to invest in the protection of your belongings. In terms of price, renter’s insurance is definitely worth it.
3. Your items are valuable.
Despite the low prices, you may believe getting insurance is simply not worth it. Maybe you love thrifting your furniture and electronics, or maybe you keep your apartment extremely minimalistic. There can also be circumstances where all your items may belong to the landlord.
Either way, these belongings do have value, and insuring them at a low cost will give you the ability to extend their value. Even if you feel otherwise, your belongings are worth protection. For example, if you find your new bed has a broken bedspring, you’ll be losing sleep either over the discomfort of a broken spring or the financial hit of an unexpected expense. A good renter’s policy will ensure your expenses are covered and you get a good night’s sleep.
4. You can’t control your neighbors.
Perhaps you are extremely careful and take great care of your home and belongings. That doesn’t mean your neighbors share that value. Big late-night parties with unknown guests or a neighbor who leaves their hair straightener on the carpet too long can lead to you losing your most precious possessions, no matter how careful you are.
5. The correct plan can replace your items with newer, better items.
This is the difference between an actual cash value plan (ACV) and a replacement cost coverage. While an ACV is cheaper, you will only receive the actual value of the item you lost. On a replacement cost plan, you will receive the newest and best version of the item you lost instead.
For example, you lose your 2015 MacBook in a fire, on an ACV plan, you would receive around 800 dollars for it, which is the current Amazon price in 2022. On a replacement plan, you would receive a 2021 MacBook.
What exactly does renters insurance cover?
Liability protects you when you are at risk of lawsuits due to injuries or other damages your guests may sustain in your home. For example, maybe you invite over your partner’s family for a delicious Thanksgiving dinner that results in multiple members getting sick. Personal liability insurance will cover their medical costs. It can also protect you from that one bitter family member who could potentially sue you for getting them sick, by covering your court judgments and legal expenses. Renter’s insurance with pet coverage is also very handy when it comes to pet bites.
Your personal belongings are covered from accidents, theft, vandalism, weather-related conditions, natural disasters, and also most plumbing and electricity problems. Remember, on basic policies, this is often limited specifically to things like:
- Weight of ice or snow
- Accidental burning
- Hail storms
- Lightning strikes
- Damage by vehicle or aircraft
- Accidental short circuiting
Note: Floods and earthquakes, however need separate coverage.
Additional Living Expenses
Sometimes, situations that are completely out of your control can make your apartment inhabitable. If you ever need to evacuate your apartment due to any issue your policy specifically covers, renter’s insurance will also cover your hotel bills, restaurant bills and even temporary dwelling. You will be able to comfortably live in a fully covered space until your apartment is inhabitable again.
Comprehensive coverage helps pay for any non-collision damage to your RV. This includes damage as a result of vandalism, fire, storm, floods, falling objects, theft, and other similar events.
Uninsured And Underinsured Motorists
There are instances in which the other driver is at fault and doesn’t have liability insurance, is uninsured, or can’t afford to pay for the injuries and damage. This coverage can help cover you in such situations. It also protects you from covered hit-and-run accidents.
What is not covered?
Floods and earthquakes are considered by many to be an act of God of nature and are not included in basic renter’s insurance policies. If you are in an earthquake or flood prone area, it might be worth it to buy a premium that will cover you during these events.
Accidents in hallways, or common areas such as gyms, cafes or loungerooms inside the building cannot be covered. It’s best practice not to leave your personal belongings in common areas.
High-end electronics also may not be covered, or only partially covered, depending on your policy. If you’re a tech lover, you may want to look into getting a separate gadget insurance plan.
Also, you will choose your own personal property coverage limit, and will not be covered beyond that limit. A big mistake that insurance buyers often make is under-valuing their belongings. For example, you might feel like you only own 8 dinner plates and 4 soup bowls, but if you consider the price of each item is anywhere between $20-100 dollars, that’s $240 to $1,200 you can avoid spending with the right insurance.
Is renters insurance worth it for
At first glance, condo dwellers may seek out condo insurance. But, the type of insurance you need is not determined by the property type as much as it is by your ownership of the property. If you’re specifically a condo owner, you are not a renter and would need condo insurance. If you are renting a condo space, however, you would need renter’s insurance. Similarly, all landlords would need landlord insurance. Here are a couple of differences between the two:
- Condo Insurance is a type of insurance for owners of a unit in a condominium. Renters insurance is for people who pay rent to live in a unit, but do not own it.
- Renters insurance will not cover for the damage to the dwelling. Condo owners own everything in the unit, so their insurance has dwelling coverage. Condo owners who rent out their units are also encouraged to get landlord insurance.
So ultimately, anyone renting any type of property, be it a condo, a boat-home or a Cycladic cave would need renter’s insurance.
Is renters insurance worth it for business owners?
Renter’s insurance has uses beyond maintaining your home. For example, if you are a business owner renting your business property, a strong renter’s insurance policy is a very good investment. Of course, different business owners would require different business policies, depending on the scale and nature of their business.
Many businesses store their assets on-site on their rented business property, for example, a clothing store that stores extra sizes in a store room. You would need a renter’s insurance policy that protects you from various types of damages that could potentially ruin your stock. A different type of business might need more coverage for liability, for example, bars and restaurants.
Is renters insurance worth it for college kids?
College is a fun-filled time in your life, and when you’re talking to your dorm buddy about finding a bigger and better place off campus, renter’s insurance might be the last thing you think about. However, renter’s insurance is crucial for college kids and it’s a lot more affordable than it sounds.
While only 40% of young adult renters have insurance, they are the highest at-risk group for thefts, accidents and liabilities. A mark of a college kid is a thriving social life, with many events that lead to many strangers (or “friends of friends”) in your rented property. Basic renter’s insurance costs less than $200 annually, and can save you on a lot more in any unpleasant situation, like a friend passing out with a cigarette in their hand, for example.
Overall, renter’s insurance is worth it.
It’s a low cost and effective way to secure your home and belongings and allow for future financial stability. Whether you’re a young couple, a successful single, a business owner or a college freshman, your valuables and the safety of your home or workspace is definitely worth the small investment.
Wondering whether you need renter’s insurance for your property? Reach out to a local insurance agent today and find out.
Did you find our blog helpful? Feel free to let us know your thoughts in the comments below.
How much does renters insurance cost?
According to insurance.com, enters insurance on average costs $27 a month, $325 a year for $100,000 in liability coverage. Different states have different costs, with some of the cheapest states being:
- Vermont with average rates of $121 per month
- Wyoming with average rates of $136 per month
- North Dakota with average rates of $133 per month
The most expensive states for renters insurance:
- Louisiana with average rates of $388 per month
- Oklahoma with average rates of $361 per month
- Alabama with average rates of $359 per month
How can I claim renters insurance?
You have to issue a claim with your insurance company, there are a few steps to this:
- Inform your landlord first and foremost
- In cases of robbery or vandalism, file a police report
- Document your losses with your insurance company and create an inventory of personal possessions. They will aid you with filing the claim.
Is renters insurance required by law?
No, it is not legally required to buy renters insurance.
Do I need a certain credit score for renters insurance?
A good credit score will help you in all areas of your life.
3 Simple Ways to Leverage Networking to Generate Leads for Insurance in 2021
How to Become an Independent Insurance Agent
A Cheat Sheet
Insurance Claim Process
Helping Clients is The Best Way to Retain Customers and Gain Referrals