Do you need renters insurance?
Yes, you do need renters insurance! Why?
Renters insurance is an affordable way to insure your stuff. This could be your laptop, phone, jewelry, crafting supplies and furniture. Basically, anything and everything. Renters insurance will also provide you a place to live if your apartment or house catches on fire or floods. Even if a car crashes into your living room!
If you are a servicemember, you might be like me; rented out numerous apartments or homes, paid for the insurance and never used it. We move often and renting is usually our best option. But, I can tell you from personal experience, that one time you need renters insurance and you don’t have it, SUCKS!
This happened at my first duty station when I was about to PCS to my new duty station. I was supposed to leave in October, however, due to the start of the fiscal year (we all know the story!) my orders were pushed to the right. My renters insurance was due to expire in mid-November and I was supposed to leave in December.
I thought the hassle of renewing and cancelling my renters insurance for a few weeks was not worth it. My risk analysis was poor and I paid for it. One lovely afternoon my apartment was broken into and they made off with my TV and multiple electronics, such as an iPod and speakers.
That robbery made me feel violated and I poured salt on the wound by having no insurance to recoup my losses. Luckily, the stuff they took was easily replaceable, but that incident quickly demonstrated how exposed I was. Had the incident been much worse, it might have set me back financially. Significantly.
Besides my own reasons that you should have a policy, here are a few other ones.
Renters insurance is required
It is very unlikely that you will be able to rent a place without renters insurance. Most property management companies and landlords require it. Even proof of it before you can legally move in. They want to make sure you’re covered in case something does happen.
I rented out my house and this was required for my tenants. I didn’t want to be liable for their stuff in case something did happen. Whether done maliciously or unintentionally, requiring renters insurance gave me that peace of mind.
For renters, make sure you renew the policy before it expires! If something does happen, as it did to me, you’re covered. Also, if something does happen and there is an insurance gap, you will have broken the lease requirements and will be held liable anyways. Forced to get renters insurance is a win-win for both parties.
Your policy pays for bodily injury and property damage caused by negligence. This would include your furry friend biting the neighbor’s kid requiring him to get stitches. Or, accidentally hitting a golf ball through the neighbor’s window, breaking multiple vases and collector plates while practicing your chip shot. My brother’s personal experience and his policy covered it.
You’re not however covered for negligence for expected or intended bodily injury. This might include throwing a dirt clod full of rocks at your neighbor on purpose. Or, trying to be a cake entrepreneur and the cake you bake in your apartment gives someone food poisoning. You would need a separate business owner’s policy and registration.
Rental becomes unlivable
Bring on the natural disasters – fire, flooding, tornadoes, and hurricanes. The devastation is traumatizing and the memories and keepsakes are unreplaceable. There is no way to soften the blow, but by having insurance, it can make the processing easier knowing you can recoup your stuff.
In addition, your renters insurance will put you up in a hotel until you’re able to move back in or find an alternative. Your landlord is not responsible for the disaster unless they are found negligent, such as a leaky gas pipe that was reported but never fixed.
An important note about the policy, there are multiple tiers of coverages and deductibles. Ensure you get the one that covers your stuff. It can always be adjusted up or down, but it would be disappointing to pick the cheapest one to find out it will only cover 50% of your stuff.
Get new stuff
As I mentioned, you can’t replace keepsakes, but you can replace that 10-year-old couch.
When you check out the various policies and decide on one, make sure you check the box for replacement-cost coverage and not actual cash value. There’s a big difference and it can be costly.
Actual cash value means that 10-year-old couch will only be worth what a 10-year-old couch is worth. Your insurance company will only pay you the fair current market value, not what you paid for it. When you select replacement-cost coverage, you’ll be reimbursed for the cost of a brand new couch.
Replacement-cost coverage is more expensive, adding between $20 and $50 to your yearly premium, but it’s worth it. God forbid something does happen; you’ll get back thousands of dollars instead of hundreds.
There are plenty of insurance companies that provide renters insurance. Some of the most popular for servicemembers is USAA and Geico for their military discounts. But, always shop around and if you can, bundle it with your same insurance provider for cheaper rates.
Prices will vary by state, liability limits, and the personal property values you want to cover. A basic policy of $30,000 of personal property coverage, $100,000 of liability, and a $500 or $1,000 deductible usually runs you $10 to $15 bucks a month.
As I mentioned, that’s a small price to pay for the peace of mind it provides and the coverage you’ll wish you would’ve had in a disaster. Just think, for the cost of an Amazon Prime account, you could protect your family and stuff in a rental.