Teri Marin

Renters Insurance Fully Demystified and Explained

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If you live in a rented home, getting renters insurance is one of the most important steps you should take. It can help you get back on your feet if your belongings get stolen or destroyed in the event of a fire or other unexpected circumstance.

However, this type of insurance doesn’t get much attention, thanks to some misconceptions going around. Many people don’t really understand what renters insurance actually is, and how it can help them safeguard their valuable possessions.

Here’s everything you need to know about it, including some common myths, debunked.

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Myth vs Reality

One of the most common myths preventing renters from getting renters insurance is that their landlord will insure their belongings. That’s simply not the case. Landlord insurance covers only the property itself, not all your stuff inside it.

Another misconception is that your roommate’s renters insurance will protect your possessions as well. The truth is, it won’t extend to your belongings. It will only cover their personal items.

Yet another myth has to do with the price of a renters insurance policy. Most people think it’s too expensive, mainly because they confuse it with homeowners insurance (which can be expensive). Renters insurance wouldn’t cost you more than $30 a month, and you can even get a policy that costs half of that amount.

Finally, many people think that their possessions simply aren’t valuable enough to get insured. But can you afford to replace your laptop, flat-screen TV, gym equipment, jewelry, and your furniture if it gets stolen or destroyed – all at once, out of your pocket?

Even if you can afford it, why should you go to those lengths? Your stuff is your stuff, even if it doesn’t cost a fortune, so you should take some smart steps for protecting it.

What Is It Exactly?

Home renters insurance is a type of insurance that covers the renter’s possessions in the event of theft, vandalism, fire, or some other unexpected event. It helps you put your life back together, especially if your home becomes uninhabitable and requires extended repair, or even a rebuild.

Does Everyone Need It?

Everyone who lives in a rented home needs renters insurance. If a disaster leaves your home in need of a repair, that’s something your landlord would handle. But they won’t pay for your stolen or destroyed possessions, because that’s not something they owned in the first place.

Renters insurance can save you money big time, so you should definitely get the coverage. Your monthly payments won’t be larger than the price of your cup of joe, but the value you get will be infinite.

What Does It Cover?

Renters insurance covers your personal property, temporary living expenses, and personal liability and medical bills.

It covers your lost, damaged, or destroyed possessions in case of the following events:

 

  • theft
  • vandalism
  • riots
  • fire
  • smoke
  • lightning
  • windstorm or hail
  • falling objects, including due to the weight of ice, snow, or sleet
  • volcanic eruption
  • damage from aircraft or other vehicles
  • water or steam overflow from a plumbing, A/C, heating, or fire-protective sprinkler system
  • freezing of a plumbing, A/C, heating, or fire-protective sprinkler system
  • damage from artificially induced electrical current.

If any of these events make your home uninhabitable for a while, your renters insurance policy will cover your temporary living expenses.

If a fire, for instance, extends to your neighbors and they decide to sue you, your renters insurance policy will help you cover the legal fees. The same goes if someone gets injured in your home due to a fire, vandalism, or any other unexpected event (such as breaking a leg due to a slip and fall). Your policy will cover the necessary medical bills.

Renters insurance doesn’t cover damage caused by floods or earthquakes, as well as damage resulting from war, terrorism, or a nuclear meltdown.

Are There Any Alternatives?

You could try self-insurance, but is self-insuring a cheaper alternative to renters insurance? Not exactly. Many people choose to keep a fund for emergencies that would cover potential losses, but you would need significantly more money that way. You can read more about it here.

 

And there’s another problem to consider. What if you use your entire fund to cover losses from, let’s say, a potential fire, and then experience a theft just a few months later? How would you cover your losses then?

 

Renters insurance is definitely the best option, as it will save you a lot of money and give you complete peace of mind.

 

So, should you get renters insurance? The answer is “Hell yes!” It will save you quite a lot of money in the long run, and give you your much-needed peace of mind. If anything should happen to your precious belongings, you’ll instantly get the reimbursement you need and quickly get back on your feet.

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