Moving is known to be one of life’s most stressful events and involves a lot of decision-making. If you’re renting you might not have as much to deal with as a buyer, but you should still protect yourself and your home the same way you would a permanent residence. Not all landlords require their tenants to have rental insurance, but you should consider a policy either way.
Studies show that even with the number of tenants in the United States increasing rapidly, less than 50 percent of them have renters insurance. The only explanation for this must be a widespread lack of awareness. If tenants knew they could save themselves thousands of dollars in potential liability claims for the cost of a few coffee runs, this number would likely be much different.
Insurance premiums will differ depending on the state you live in, however, the cost is never unreasonable. A standard renters insurance policy shouldn’t run you more than about $15 per month, which is even cheaper than some streaming services. When you consider what renters insurance protects you from, it’s clear how beneficial it is, even just for peace of mind.
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Why consider renters insurance?
The whole purpose of renters insurance is to protect the tenant from unforeseen events. Some people might be under the impression that their landlord takes care of any insurance related to covering their property, when in fact no such policy exists. Unless you have already agreed to something when signing the lease, it’s important to make sure you get the coverage you need.
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Some things protected by a renters insurance policy:
- Personal property in the rented unit—in the event of theft, fire, or sewer backup damage.
- A policy will pay back a value deemed equivalent to your damaged or lost/stolen property.
- Liability—if someone is injured on your property.
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What to expect from a standard renters insurance policy
Even the most basic policy will cover you from multiple unforeseen events. No matter where you live, all regions are subject to vulnerabilities of some sort, so protecting yourself from the unknown is always a safe bet. Not only can you protect your personal belongings, but you won’t need to worry about liability or any expense incurred by certain covered events.
Personal Property
When it comes to personal property damage, it’s important to understand the covered events. These are formally referred to as “covered perils,” which include:
- Fire and lightning
- Wind and hail
- Smoke damage
- Explosions
- Theft and vandalism
- Water damage and mold
- Damage from leaking or freezing appliances or plumbing
- Volcanoes
- Snow and ice collapse
Think about how many items you would have to replace if your home was suddenly involved in a fire or damaged by a water pipe burst. These events might seem far-fetched to you today, but most of the time when people go through these things, it was the last thing they were expecting.
Personal Liability
Liability isn’t something people typically want to think about, but the risk is there, and you never know when you might find yourself dealing with an accident. Shocking data from the National Safety Council explains:
“In 2020, an estimated 156,300 preventable injury-related deaths occurred in homes and communities, or about 78% of all preventable injury-related deaths that year. The number of deaths was up 18.9% from the 2019 total of 131,400.”
In other words, the chances of an accident occurring at home are much higher than at any other location. If you’re someone who likes to entertain, this is going to be especially important. Even if you’re more of an introvert, you never know who might have to take a step on your property to make a delivery or interact in some way.
Renters insurance will cover any necessary medical expenses of an injured party that had an accident at your home. The policy will also help cover any legal expenses you might face because of an accident.
Legal woes are no joke, and whether you want to enjoy your home alone or with others, it makes sense to protect yourself from any unforeseen issues. After all, your home is supposed to be your safe space, not a space to create more stress or worry.
Living Expenses
Most people don’t have a second home to stay in while their home is being worked on. Renovations are planned meticulously specifically to displace a family for as little time as possible. So, imagine what a nightmare it is to make arrangements after a natural disaster or any other unexpected event. If any covered perils displace you from your home, a renters insurance policy has you covered. Natural disasters often render a home unlivable, so your policy should help cover any expenses incurred as you make alternate living arrangements.
Any covered perils that might displace you from your home will be covered by the policy. While your landlord’s insurance will cover the building itself, that does not cover any of your relocation expenses. A renters insurance policy will reimburse you for all types of costs associated with relocating if your company deems your home uninhabitable.
Some of the expenses covered include:
- Utilities—any amount that exceeds what you would normally pay at your rental unit.
- Rent—if your relocation unit costs more than your original rent and meets the standards laid out by your policy for it to qualify
- Food—If you don’t have access to a kitchen, your policy might reimburse you for meals.
- Fuel—If there is a significant change in your commute distance.
- Pet Care—Reimbursement for boarding if the relocation space doesn’t allow pets.
- Storage—If you have to move a significant amount of personal property and don’t have space in your temporary unit.
When it comes to living expenses, you have to make sure you understand the boundaries laid out by your policy. Your insurance company won’t provide you with anything outside of your typical standard of living. The purpose of this insurance is to make a renter whole again, following an unpredictable event or disaster. So don’t think you’ll be able to get more than what you lost, but you can be sure that your insurance company will do what they can to replace everything up to a fair limit.
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The Bottom Line
It’s normal to hesitate when you’re considering a new monthly expense. Small amounts do add up and you want to be sure you’re making the right decision. Some people might hesitate to invest in a new insurance policy because they don’t see the value in paying money towards unlikely events. It’s even more daunting if you think about it as another expense to add to your list. However, the cost of renters insurance is quite insignificant when you understand a little more about what it provides. Simply put, it’s a small price to pay for peace of mind.
Whether you plan to rent for the rest of your life or if you’re saving up for your dream home, it’s in your best interest to consider a renters insurance policy. You’ll be protecting whatever personal assets you have now, along with securing your financial future by protecting yourself from liabilities and significant loss. If you want to enjoy your home with true peace of mind, a renters insurance policy is right for you.
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