While homeowners across America typically understand the significance of insuring one of the most costly purchases you may ever make, renters, on the other hand may not understand importance of renters insurance.
Whereas some renters view the added money that goes toward renters insurance each month as a needless bill, the added coverage you obtain from renters content and renters liability insurance may spare you from needless headaches in the event of theft, accidental or environmental damage.
To truly understand how valuable renters insurance is, you must first gain an understanding of both renters content insurance and renters liability insurance.
In short, renters content insurance covers the replacement value (or current estimated depreciated value) of items that are stolen, damaged by fire or in some cases, lost.
On the other hand, renters liability insurance protects the renter from paying for an accident that causes loss or damage to an individual or to the property.
Here are five benefits renters gain from purchasing renters insurance:
Protection from theft
As an avid Air Jordan collector, I made the decision to pay an extra $10 a month for renters content insurance to protect my beloved sneakers and other personal items from potential theft.
While the $10 monthly charge cuts into my Texas de Brazil lunch fund, the $5,000 in coverage I enjoy every month gives me peace of mind that no piece of steak can provide.
Protection from fire
The fire protection clause on my renters contents insurance was a heaven send when my apartment building caught on fire during my sophomore year of undergrad.
While my personal items were not damaged in the fire, the insurance company paid for my roommate and I to stay at a hotel for a week, and even gave us money for food until our apartment was treated for smoke damage and repairs.
Protection from damages you cause
If you cause a fire in your rental that spreads to your neighbor’s rental, you may be responsible for the damages they incur unless you have renters liability insurance.
In short, renters liability insurance compares equally to full coverage car insurance as renters liability insurance protects you from most of the damages that you may cause.
According to the National Association of Insurance Commissioners, an insurance policy that includes both renters content insurance and renters liability insurance will cost you $15 to $30 extra each month.
Protection from visitors’ injuries
If you have renters liability insurance and a guest falls and gets injured, your policy may cover the cost of the medical and legal bills.
In this case, renters liability insurance gives renters added protection from potential financial disasters that may otherwise become life-changing scenarios for your finances.
Protection from damages you inadvertently cause
Renters liability insurance also covers you from damages you may inadvertently cause.
Here is an example of property damage liability coverage according to the Progressive insurance website:
“You swerve to miss a deer and accidentally hit your neighbor’s car, which is parked on the side of the street.
If you have selected a split limit for Liability insurance, the Property Damage coverage portion would pay to repair or replace your neighbor’s damaged car, up to your selected limit of $10,000. Since the car repairs amount to $500, your insurance would cover the full amount of damage.”
Although you may not be a homeowner, renters insurance provides you with many protections that may be beneficial in the future or in the event of an emergency.
An extra $10 a month for renters insurance today, may in fact end up saving your finances in the future.
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