Why you should get renter’s insurance (if you’re a renter)

Financial stability, business success and insurance conceptMost adults understand the need for insurance. It protects us from financial ruin. Insurance covers large expenses in case of an emergency.

You may be able to pay a $1,000 medical bill out of pocket somehow. That you can fight your way through. It’s a $20,000 life-saving surgery that force you into bankruptcy.

That’s what insurance is really for. To keep from losing everything financially due to something bad happening. Most of us have insurance in different forms.

Car insurance. Health insurance. Life insurance (hopefully). Homeowner’s insurance.

We’ve all at least heard of these types of insurance. But there’s one type of  insurance that most don’t even know exist: Renter’s insurance.

If you rent, you may not think there’s a need. That’s silly. You need renter’s insurance. Here a few reasons why:

Your landlord isn’t liable for your stuff

Even though you don’t own a home, you still have stuff. That stuff will cost you a lot if you have to replace it all at once.

If a busted pipe causes water damage in your apartment, your landlord typically isn’t liable for your stuff that’s ruined. The landlord is liable for repairs to the apartment and not much else.

It pays to have renter’s insurance.

That exact situation happened to me. A broken pipe leaked in my apartment ceiling and destroyed a bunch of new merchandise. The room was flooded and the landlord had no obligation to reimburse us for our stuff. They just repaired the ceiling.

Guess who got renter’s insurance soon after?

It covers more than just “stuff”

Renter’s insurance can also cover you for personal liability and medical payments. Suppose someone gets hurt in your apartment. You can be held personally responsible in a court of law for their medical bills.

Having a good policy can help in that situation.

Look for a policy that covers natural disasters such as floods and earthquakes if they affect where you live.

Be sure that your policy covers  high-value items if you have expensive jewelry and electronics.

You’ll want a policy with “replacement value coverage”. That means you get paid what it would cost to replace your items. Otherwise the insurance company will only pay “cash value” based on the age and current value of the damaged items.

The best renter’s insurance will pay emergency living expenses. That means they will pay your living expenses if you’re forced to vacate the property during repairs.

Don’t just buy cheap

Choose your renter’s insurance based on what you need. Don’t just buy the first cheap policy. Don’t buy based on price alone.

Shop around. Insurance companies sometimes give deals based on bundling with other types of insurance.

Before buying your insurance, take inventory of your possessions. Take pictures. Write a list. Note how much it would cost to replace your stuff.

If you’re renting then get renter’s insurance as soon as possible. You never know what could happen.

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