Is renters insurance really worth it?

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If you’re on a tight budget, the first thing you do is consider everything that you can go without. On the top of that list – you might have put renters insurance.

If so, I’m here to tell you foregoing an expense such as renters’ insurance is a big mistake. Let’s dive into the nitty-gritty of why you need this type of coverage. 

Why I believe renters insurance is really worth it

Over the holiday season, I was home visiting my family and deep into the Christmas spirit.

Three hours away it was 8 degrees outside and the freezing temperatures at my apartment caused the pipes to burst.

Not only was I not notified by the management of my building (a whole other story) but my apartment had flooded 3 inches.

This is why renters insurance is SO important.

What is the purpose of renters insurance?

The purpose of renters insurance is to protect you and give you financial peace of mind should anything in your home be damaged due to any type of catastrophe like a fire….or frozen pipes.

Renters insurance also protects your personal property from theft should someone break into your home. With your coverage, you’d have the money to replace anything that was stolen, one less thing you need to worry about. 

Renters insurance in some cases can also cover medical expenses for a person injured in your home.

All sorts of things happen especially when disaster strikes. Having this extra coverage in your policy makes a world of a difference.

Why do you need renters insurance? 

Accidents happen, that is a simple fact of life. However, even when something is an accident for there to be a “pay-out” somebody must be liable and accept the responsibility.

Ideally this individual would have insurance that will cover any initial damages. 

When my apartment flooded, I had to file a claim and take pictures of everything that was damaged. My insurance adjuster reviewed the photos and issued me a check so I could replace all the damaged property.

They also paid for me to have a hotel suite since I wasn’t able to live in my unit. Additionally, anything I spent while at the hotel was reimbursed back to me.

If I did not have renters insurance I would’ve had to use my own money to replace my furniture and I would have to pay for movers to help me move from one unit to another.

Thankfully, I did not skip out on this expense and everything ended up working out.

Who should have rental insurance?

Every single person who is renting any type of property should have renters’ insurance.

You will be responsible for covering the cost of damages if you go without insurance. This could set you back from reaching many financial goals. Although it’s not necessarily a requirement it’s highly recommended. 

For instance, if you have a pet dog that ends up biting a neighbor your policy could cover the medical damages associated with the bite.

Sure, your relationship with your neighbor might be a little rocky from now on but at least you can move forward knowing that you don’t have to come out of your own pockets to pay for any medical damages.

Common myths surrounding renters insurance

Renters Insurance is too expensive

Many people think that renters insurance is too expensive. The truth is like with anything else premiums vary.

This article published by StateFarm renters insurance on average costs roughly $12 a month for up to $30,000 in personal property coverage.

When I put that into prospective for myself, I realized that is only two drinks at Starbucks!

The landlord covers property damages for renters 

Your landlord is in the business of making money. They likely aren’t going to provide you with coverage of any kind.

In fact, your landlord’s insurance only covers the building damages due to negligence. Sometimes the landlord will buy coverage for appliances within the unit but they’re not liable for any of the damage that the appliance might cause.

For example: the refrigerator stops working and spoils all the food or the stove isn’t functionally properly and ends up starting a small fire in your home. You are still responsible for the damages. 

I don’t have a lot of stuff I need to protect

You can get clear understanding of how much your belongings are worth using a value estimation calculator. You’d be surprised if you were to do a sweep of your home and see just how much things of value are inside.

Also, value doesn’t always have to be monetary. Think about how devastating it can be to have something that means the world to you taken from you.

Tips for picking the best policy 

Renters insurance is relatively inexpensive but that doesn’t mean it’s a one size fits all type of deal.

It really boils down to what you want to protect. If you are someone who has really expensive jewelry, electronics and gadgets you’ll likely need supplemental coverage known as “floater” coverage since many insurance policies cap at the amount of personal property pay-out.  

Once you understand what you want and how much you need you really need to research companies and determine the policy that works best for you. Take a look at the following companies for help getting started.

Erie Insurance
American Family
State Farm
Liberty Mutual

Related content: Guide to moving out on your own for the first time