Why Renter’s Insurance

by David Ning · 12 comments

get renter's insurance now

When I rented the new apartment back in February, one item that surprised me was renter’s insurance.  I never purchased something like this before but it certainly caught my attention when I was told that it would be mandatory.  At the time, I contemplated on the extra $18 dollars a month and I decided to get it for the peace of mind but I would never looked into it if it wasn’t mandatory.

Why Renter’s Insurance

I just saw an article today stating that most people don’t buy renter’s insurance even if they are required. If you are one of them, read about why you would want to reconsider.

Inexpensive for the Value It Provides
Don’t get me wrong. $18 every single month is money I would rather save, but the same amount can get as much coverage as $30,000 just in case anything happens. You are also getting a peace of mind because having to replace everything you’ve bought in the apartment is a major financial setback.

Liability
Renter’s Insurance doesn’t just cover replacing your belongings. Since renters are responsible for problems they create including accidents, having insurance allows them to pay for unexpected charges just in case something bad happens. Can you imagine having to pay for all the appliance and remodel of the whole kitchen if you have a fire caused by putting the wrong container in the microwave?

What You Need to know About Renter’s Insurance

Read the Fine Print
Different companies cover different things. Most cover fire and theft but many don’t cover water so don’t just look at the monthly price as water leaks are a major cause of lost in apartments (especially in older ones).

Also check on what type of belongings the policy covers because some don’t cover items like high priced jeweleries.

Liability Insurance
This is important because someone can sue you if they were injured from something that started in your apartment (e.g. a fire). Better safe than sorry.

Belongings
Some policies will cover you to replace all your belonging while other policies will only give you back the cash value of how much these things are worth. Obviously, you would want to get a policy that will replace the items because of depreciation.

Do Your Homework.
Don’t forget to look around and compare different companies that want your business. As stated above, companies provide different rates as well as different coverage so make a chart and start comparing.

In Closing

If you rent an apartment right now and never thought about renter’s insurance, start now and examine whether it makes sense for your circumstances. It’s an additional expense that you didn’t have before, but I strongly recommend you to at least give it serious consideration.

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{ 12 comments… read them below or add one }

MoneyGrubbingLawyer September 8, 2008 at 9:10 am

Renters’ insurance is definitely worth the cost.

If you’re a student renting while living away from school, check to see if you can be covered under your parents’ homeowners policy- this can often be a cheaper option.

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SingleGuyMoney September 8, 2008 at 2:35 pm

Good Post. Most people don’t realize that they need renters insurance until it is too late. I own a rental property and when my tenants signed the lease, I told them that I insure the structure only and they may want to look into renters insurance.

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Sam of Fix My Personal Finance September 8, 2008 at 9:23 pm

Good post. They’re not really expensive so its worth it especially when you consider what you get in return. The average cost for $20,000 worth of insurance is only around $100 a year, depending on where you live, according to Diggs. For only a small price-about the same as a couple of take-out pizzas each month-the financial burden of buying new things after a catastrophe could be significantly lessened.

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Renee September 9, 2008 at 10:34 am

Great post. Often people don’t think about these things until it is too late. 20 dollars for peace of mind is worth it.

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Jeff from All Renters Insurance Info.com September 9, 2008 at 6:03 pm

The picture does it for me, so many times you find yourself making decsions because you’re short of money. Renter’s Insurance is something you just need to have to give you the peace of mind.

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Toni September 11, 2008 at 12:03 pm

When my apartment was broken into, I was so glad I had renter’s insurance. I don’t understand why folks would think it is optional.

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Phil September 12, 2008 at 7:56 am

I have a hard time stomaching insurance. In my mind, insurance companies are much like casinos. They rip off the vast majority of people, benefit greatly a few, and always make money for the shareholders.

Are there (m)any not-for-profit, or community based insurers? That’s something that I could get behind.

For now, I will play the house odds and save my $18 a month.

Anyone else feel this way?

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Ram September 13, 2008 at 3:59 am

I agree with you Phil. I have really grown to believe that “Insurance” is evil so only take it when absolutely necessary. I believe this is a risk an individual can bear. I see risk taking as a measure of financial well being. If one can’t stomach a risk of 10-30 thousand dollars then it a sign of something fundamentally wrong. It could be either not saving enough or keeping expensive things at home that really must belong elsewhere.

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Jordan Clark September 13, 2008 at 10:24 am

I also agree with Phil. I’ve looked into rental insurance and I have to say I don’t think it’s worth it for us specifically. However I should also say I think it’s probably a good idea for most renters.

Here are my personal reasons:

1. We self insure by having an emergency fund of 6 months of living expenses, if we lost everything it would not financially devastating.

2. Our family is frugal and just starting out so a lot of our possessions were hand-me-downs and don’t have much value. We could probably replace everything for less then $10,000

3. We live in a new secure concrete building with fire sprinklers which are very effective. Fire insurance is of limited effect because the damage would be limited to a single room.

4. There has never been a theft in our building, we aren’t on the ground floor, and we have steal doors/door frames, good building security and our computers are secured with steal cables so the chances of theft are also small.

Plus when I checked online for renters insurance the premiums I found were in the $30/month ballpark.

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Arthur Savage October 16, 2008 at 4:59 am

I think renters insurance is very important. I wouldn’t be without it. On the other side of the coin landlord insurance is important for your let property.

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melissa November 5, 2010 at 7:12 am

i work for an insurance company and i am always surprised at how many people turn down renters insurance. i’ve seen several people that i offered the coverage to turn it down on the spot (thinking that i am trying to upsell them), only to suffer a catstrophic loss. one person that declined the coverage had an apartment fire that destroyed all of his belongings about 4 months after he moved in, a loss that he is still struggling to recover from. the kicker is that since he has his car insured with us, adding that coverage would have only increased his monthly bill by about $6. if you rent, ask your auto insurer about a multi-line discount, and the savings on your auto insurance will make the renter’s policy almost free.

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lifeisdynamic January 28, 2012 at 5:56 pm

Although expensive for many, insurance of all kinds is worth the investment (that is what it is really). Like so may others, I have paid insurances of all colours for many years and not made any claims and questioned when things were financially tight some years, whether I could opt not to continue or reduce my policy. There have been a number of times I have thought this, only to find the following year I have needed to make multiple claims. When I added how much damage there was to property and how much I spent on premiums over the years, I realised I had well and truely (and then some) had value for money – not to mention peace of mind during the period of no claims.

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