Photo (cc) by Mikhail Golub
When I moved into my first apartment several years ago, the landlord mandated that all tenants carry renters insurance. So I enrolled in a plan without giving it much thought.
It turned out to be very valuable when a plumbing problem in an upstairs apartment flooded the closet in my master bedroom.
It’s easy to overlook this coverage if it’s not required by your landlord. Perhaps it never occurred to you, or maybe you believe some of the myths about it. Or maybe you don’t think your possessions have enough value to make it worthwhile.
You’re probably wrong about that. Says the National Association of Insurance Commissioners:
Renters insurance policies can cover everything from electronics to clothing to household appliances. Even a minimal number of items could add up to thousands of dollars’ worth of merchandise, which can all be covered in a basic policy.
Here are some additional facts worth knowing if you’re still straddling the fence about buying a renters insurance policy:
1. The landlord’s policy will not cover your personal belongings
Contrary to popular belief, policies carried by landlords typically cover structural damage to the building and not your personal property.
“After acquiring a rental housing unit, landlords change their insurance policies from a traditional homeowners policy to a rental policy, and when they do that, it only covers just the structure, not the content or any of the tenant’s belongings,” James Emory Tungsvik, president of the National Association of Residential Property Managers, told U.S. News & World Report.
So don’t expect to have your sofa replaced if the living room catches fire.
Your renters policy will also cover theft of your belongings, whether they’re stolen from your apartment or from anywhere else.
2. Your coverage likely extends beyond your personal possessions
Your renters policy likely will cover your legal costs if someone sues after having an accident at your place, and it will cover a certain amount of their medical bills.
It also will cover costs if you are responsible for damage to other people’s property. A common example offered is when you (or your child) throw a baseball that breaks someone’s window. Or perhaps you allowed the bathtub to overflow, causing damage in the apartment below.
3. Renters insurance isn’t as expensive as you may think
Thinking the cost of coverage outweighs the benefits? Think again. While the price will vary depending on where you live, the various cost averages we’ve seen range from $12 to $30 a month, much less than you’d spend to replace your belongings.
When I was renting an apartment, $50,000 of coverage was about $159 annually. As with most insurance policies, the higher the deductible, the lower the premium.