Is renters insurance worth it?

There are many misconceptions surrounding the purchase of renters insurance. Some renters feel that because they do not have any financial risk associated with owning the property they dwell in, there is no need to pay for renters insurance. Others feel that the cost of paying for renters insurance is too expensive. These are two of the most common misconceptions regarding renters insurance.

Here are some of the top misconceptions renters have when it comes to purchasing insurance.

“Only personal belongings are covered.”

True, a renters insurance protects a renter’s personal belongings, however, the policy covers much more than just that. Most renters insurance policies protect the tenant from damage caused to their own personal property, a neighbor’s belongings and any damage caused to the landlords property that may be damaged because of something that happens within the policy holder’s dwelling. For example, if a flood happens causing water damage in a neighboring apartment, a renter’s insurance policy will cover damage caused to the neighbors apartment and their personal belongings too.

“I do not own enough.”

Rental properties can be exposed to a variety of different factors which can cause a little bit of damage or a tremendous amount of damage. Just like any type of dwelling, rental properties can be damaged by fire, theft, bursting pipes or a broken appliance. Many renters underestimate the value of their personal belongings. The truth is, the replacement value of a renter’s personal possessions adds up and it would be costly to replace everything. According to State Farm, the average renter owns more than $35,000 worth of personal belongings. Renters insurance will help offset the amount it would cost to purchase everything damaged within the apartment.

“My landlord covers everything.”

Renters are not obligated, unless the damage was caused by their recklessness, to repair any structural or anything owned by the rental company. However, their personal belongings are not covered through the rental company. The landlord’s insurance policy will only cover structural damage, not anything within the apartment. The only way to protect personal belongings is to have a renters insurance policy.

“It costs too much.”

Many renters feel that buying insurance costs too much. However, many do not consider the costs associated with losing everything. Many renters insurance policies are less than $20 per month, depending upon the type of coverage purchased. Overall, renters insurance is well worth the cost.

Go through the apartment or rental property and take an inventory of all personal belongings and anything the landlord will not cover. Calculate how much it would cost to replace everything. Compare the final calculation with how much it would cost to pay for renters insurance. Determine if the small monthly payment is worth risking losing everything.

When looking to real estate lowell ma, area, speak with a local real estate agent to determine what will be covered by the landlord in case of a disaster. Make a list of items not covered and contact the insurance company to get a quote for renters insurance coverage.