Most people are fully aware of the need to carry homeowner's insurance to protect their home and contents. However, the renters among us might not understand that if you are renting, you still must face the same questions and quandaries pertaining to insuring your valuables and personal belongings. Here are 5 important reasons to carry renter's insurance:
- The policy of your landlord doesn’t cover your own personal property: A disturbing number of renters think that their property’s insurance policy covers them if an incident were to happen. This is not true -- it only covers the structure. You, as the renter, need protection for your personal effects.
- Liability Protection is a must: It's a fact of life that accidents happen, and what many renters fail to understand is that you could be on the hook for personal injuries that are suffered by your guests. Renters insurance provides financial protection for situations such as a mailman being bitten, a neighbor slipping and falling down a flight of stairs, or an overflowing bathtub.
- Replacement costs are not cheap: Even if you don't have all brand new possessions (who does?), replacement costs can be prohibitively high when you consider that in the event of a disaster, you would end up replacing everything -- not just one or two items.
- Renters insurance doesn't have to be costly: Just like with any other type of insurance, renters insurance premiums do vary: policies are usually priced to minimize costs. According to State Farm, policies are routinely about $1 per day.
- Replacement cost policies are preferable: It's important to distinguish between renters insurance policies that provide actual cash value in the event of a claim versus those that provide for replacement cost. Policies that pay actual cash value are inferior, since they only pay what your belongings were worth at the time of the incident, and not what it will cost you to replace the item when you go to purchase new.
It is vital for you to remember that as a renter, you are not responsible for insuring the structure that you are leasing; however, when all of your personal effects and belongings are figured into the equation, it quickly becomes abundantly clear that purchasing and keeping a comprehensive renters insurance policy is imperative to your peace of mind as a renter.