Some renters consider renter’s insurance an optional expense. They seem to think that because they’re in a temporary living situation that they somehow have less exposure to risk than someone who’s in a permanent living arrangement, such as a homeowner.

by Jimmy Harris

Unfortunately, this notion doesn’t jive with reality. In some respects the truth is the very opposite – renters are at more risk than their home-owning counterparts. For instance, apartment renters are many times more likely – 85 times more likely according to the National Crime Prevention Council – to have their living space burglarized than a homeowner is.

But increased risk of loss isn’t the only reason renters should get renter’s insurance. Many landlords and apartment communities will require proof of insurance before they’ll let you sign a lease. They do that because they realize that their insurance protects their building in case of fire or flood, but it won’t cover any of their renters’ property. And the last thing they want is to be involved in nuisance claims filed by unprotected renters.

Then there’s the issue of your liability should a visitor to your house or apartment be injured. If a friend is injured while visiting you, they could sue you for damages, and you – not the landlord – may be held responsible.

At this point you may be saying to yourself, “Well, I see the value of renter’s insurance for people with lots of expensive possessions, but I just don’t own enough nice stuff to make it worth my while.” If that’s what you’re thinking, you should do this exercise: go through your house or apartment and make a list of everything you own: computers, TV, stereo, furniture, clothes, sports equipment, pictures, utensils, linens – everything you own.

Then add up the value of everything on your list. (You’ll probably be surprised at the money that’s tied up in the items you own.) Then ask yourself – if a fire were to destroy all of my possessions tomorrow, could I afford to replace them, and replace them at the same time? If the answer is no, then you shouldn’t waste any time getting a renter’s policy.

When you do look into getting a renter’s policy, you’ll find renter’s insurance is one of the better values available on the insurance market. For probably less than $20 a year (your actual cost will depend on the value of your possessions) you can protect everything you own.

Some of the things to consider when you do decide to get renter’s insurance:

• Look for discounts. You may get a multiple-policy discount if you combine renter’s coverage with your car insurance. You may also be eligible for a safety discount if you put in a deadbolt lock or have a burglar alarm.

• Waive the deductible. As with other types of coverage, the higher the deductible, the lower the premium. But since the premium for renter’s insurance is usually very affordable, there’s probably little reason to bother with a high deductible.

• Pump up the liability coverage. Whereas homeowner’s policies typically come with $300,000 of coverage, most renter’s policies come with only $100,000 of liability protection. And $100,000 doesn’t pay for much in today’s health care system. You may want to bump up your total to the homeowner’s level. It won’t cost much and will give you lots more protection.

Renter’s need insurance protection just as much – or even more – than homeowners do. If you invest in a renter’s insurance policy you’ll be getting coverage of everything you own; and so you’ll have some peace of mind no matter what happens in the future. The cost is relatively low given what you get in return. That being the case, not getting one just doesn’t make sense.

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