Renters need insurance, too
A majority of renters might be overestimating just how much their landlord is responsible for — when it comes to insurance.
Only 43% of renters in 2006 had insurance, compared with 96% of homeowners, according to a 2006 poll by the Insurance Research Council.
Most apartment dwellers aren’t being intentionally irresponsible on this front but simply don’t know that they need it, says Jeanne Salvatore, senior vice president of public affairs at the organization.
“Tip No. 1 for a renter is simply to get the insurance,” says Salvatore.
A few popular misconceptions are the culprits behind renters forgoing coverage for the belongings in their home, industry experts say.
“People say, ‘I don’t think I have a lot of stuff. I don’t want to pay money to insure it.’ They don’t think it’s very valuable,” says Amy Danise, senior managing editor of Insure.com.
But even the sparsest of apartments could have at least $1,000 worth of stuff after things such as a bed, computer and clothing items. “It would really be a financial disaster to renters to lose all of your things in something like a fire and not have insurance for it. That kind of financial blow can affect you for the rest of your life,” she says.
Many renters also wrongfully assume they fall under the protection of their landlord’s insurance, Salvatore says. Landlord policies would take care of the actual building and common areas in the case of a disaster, but not the belongings of the tenants.
Unlike homeowners, renters policies don’t come with an automatic percentage for covering possessions, leaving the tenants the choice of determining the appropriate amount of coverage.
Renters should photograph belongings and tally up their value to make sure the policy would take care of replacing everything they own.
Beyond the loss of personal possessions, a renter could face litigation if a guest gets hurt in the apartment and the renter is at fault. Renters insurance policies offer liability coverage in much the same way that homeowners policies do, and even cover medical costs.
“If you have a party, and somebody trips on your rug and has to go to the hospital and get an X-ray, they can file a claim and don’t have to sue you,” Salvatore says.
The immediate survival expenses can quickly add up if a fire or other mishap displaces a renter. A renters insurance policy will cover additional living expenses, such as essentials you need to buy and other living expenses that surpass your typical rental costs, Salvatore says.
Renters insurance can cover a lot, but it doesn’t actually cost much. Average costs for the coverage ran about $176 in 2008.
“That’s probably a fancy coffee drink a week,” says Salvatore. So forgo the Starbucksand put the money into one of these policies, which can typically be purchased from the same provider of your auto coverage.
“It’s a small amount to pay for peace of mind,” says 61-year-old Suzette Eaddy of Corona, N.Y., who says she’s had the coverage for many years — and hasn’t had to use it yet, luckily.
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