Renters insurance covers more than just theft of your belongings. It also covers living expenses if you're displaced by problems with your rental, as well as accidental injuries to other people. It can also protect you if someone is injured while visiting your rental.
So should you buy renters insurance? Here's more about the cost, what it covers, and when it's required to help you decide.
How much does renters insurance cost?
The average renters insurance costs $12 a month for $30,000 in personal property coverage, $100,000 in liability coverage, and a $500 deductible, according to a Nerdwallet analysis, which also breaks down the average cost by city and state.
The amount you pay for renters insurance will vary depending on your location. For example, if you live in an earthquake or fire-prone region, you might pay more. You might also pay more if you have a large dog or live in a high-crime neighborhood.
How much coverage you want will also affect how much you pay. For example, if you want coverage up to 100,000, your monthly cost will be around $25.
Also, if you have made claims in the past three to five years, your policy may be more expensive.
You can lower the cost of your insurance plan if your building has a security system, sprinklers, and smoke detectors. You can also sometimes get a deal if you bundle your renters insurance with your car or another insurance policy.
What does renters insurance cover?
Renters insurance will reimburse you, usually after a deductible (the amount you have to pay), for a wide range of issues from theft to new clothing if, for example, yours is lost in a fire.
Keep in mind that the cause of the loss must be included in the policy. For example, some policies cover dog bites while others don't.
Most plans will cover the items outlined below.
Personal property including furniture, electronics, and clothes if yours are destroyed by fire, stolen, or vandalized
Temporary living expenses if you're displaced by damage to your rental
Liability coverage, meaning your insurance will pay for accidental property damage and injuries to others—it will also pay for legal defense if you’re sued
Medical coverage for minor accidental injuries to guests, regardless of who is at fault
When insurance replaces your furniture or electronics, they will typically reimburse you for the amount the items are currently worth. For example, if you bought your sofa 10 years ago, you'll get its current value rather than the amount you paid a decade ago.
But you can add "replacement cost coverage" to your policy, which will increase your monthly payment but will cover the cost of buying brand new furniture.
Is renters insurance required?
It's not required by law, but some landlords might include it in the lease as a requirement.
They may do this to protect themselves—if your property is damaged or stolen, you may be less likely to sue a landlord if renter's insurance covers the loss. They also may be off the hook if your rental needs significant work and you need temporary housing.
A landlord may also consider you a more reponsible tenant if you're willing to purchase renters insurance.
Whether it's required by your landlord or just an option, renters insurance is rarely a bad idea to protect your valuables and to have a sense of security. Shop around—check out three to five polices for the best plan.
Sources: Forbes, Nerdwallet, State Farm
Commentaires