It's easy to understand why someone who owned a home would need an insurance policy. After all, what if there was a fire, or the house was robbed? The homeowners would obviously want to have some way of knowing that, in the event of such a tragedy, they'd have a security net to fall back on.
The same holds true for renters, but for some reason apartment dwellers are significantly less likely to take out a renters insurance policy. Some buildings require tenants be insured: Even if your building doesn't, you should at least consider it.
Here's a quick guide to help you get started:
Let's say, hypothetically, that you don't have renters insurance. One day you come home to find that your apartment has been robbed. Your television and game system are gone, as is your laptop and tablet. With just four things stolen, you're out a thousand dollars or so.
Or maybe you don't get robbed. Maybe, instead, you decide that you're going to take a nice, relaxing bath. You get a phone call as the tub is filling up and completely forget about it, flooding not only your bathroom, but your downstairs neighbor's bathroom as well.
If it's not these situations, it could be a fire, a bad storm, or any number of unexpected problems that lead to you suddenly needing to pay a lot of money for repairs or replacements. Renters insurance helps you handle that.
Different insurance plans will have slightly different policies on what they do and don't cover, but most insurance plans have a few things in common.
Most plans will have some level of personal property coverage. This is money that goes to replace or repair items that are stolen or damaged. Some policies simply cover everything you own up to a certain dollar amount, while others require you to make an itemized list of the objects you want covered.
If you have a lot of high-ticket items in your home, it may be worth it to look for an extended personal property plan. This way you can have security in the event that these expensive objects need to be replaced.
Liability coverage is another element you can expect in a renters insurance policy. This covers things that are (legally speaking) your fault. For example, if a guest trips and falls off your balcony and sues you, liability insurance can cover a portion of his or her medical bills. The same holds for damage made to another unit in the building.
Many policies also cover living expenses in the event that a covered tragedy requires you to temporarily live outside of your apartment. For example, your plan could cover hotel costs in the event of a fire or storm that renders your apartment uninhabitable for a short period of time.
There are a number of myths and misconceptions out there about renters insurance. For example, many people think that the policies are outrageously expensive. In reality, they usually run between $15 and $30 a month, and are significantly more affordable than dealing with a disaster on your own.
Many renters assume they're covered under their landlord's insurance policy for the building. However, that is almost never the case – unless you've heard outright that your items would be covered in the event of damage, assume your landlord's policy only covers the building itself.
Finally, many renters think that they don't have anything valuable enough to justify insurance. When you actually start to look at your belongings, however, you're likely to find that you do. It's not just high-ticket items like technology that renters insurance protects, after all – your clothes, furniture and decor can all be covered under your plan.