You’ve decided to get a new apartment. You’ve been browsing all the local “apartment for rent” listings in your area. And you’ve been soaking in all the renting advice and apartment advice you can find.
As you’re meeting landlords, exploring your rental options, and generally going through the motions of apartment hunting, however, there’s a single issue that keeps coming up:
Renters insurance. People often recommend it. Some landlords require it.
But should taking out a policy be at the top of your to-do list? Could renters insurance actually be useful to you or is it just another monthly expense that’ll be added to your cost of living? Keep reading to learn more about renters insurance and how it can help you cover your bases.
Renters Insurance 101
The first question that current and future tenants have to ask is, “What is renters insurance?”.
People will have a lot of technical explanations to give you, but renters insurance is best summed up as “homeowners insurance for tenants”. Even though you might not own the apartment or house you’re renting, the items you do own — like laptops, smartphones, and furniture — may be both valuable and a total pain in the butt to replace.
Nobody ever expects to be the person getting featured in the news because a tornado or a fire has just destroyed their house. But if you ever find yourself in that position, you’ll want to have a coverage policy that’ll allow you to rebuild your life with some money in your pocket.
What Does Renters Insurance Actually Do?
We’ve just talked about what renters insurance is and why it’s important to have. But none of that tells you what exactly you get when you take out a renters insurance policy. A lot of the features available to you will depend on the details of your policy and the plans your insurer provides. But here are some of the most common things that most renters insurance can cover:
1. Personal Liability Coverage
The thing about accidents is that you never know when they’ll happen or how. A friend of a friend could trip on your welcome mat and break an ankle. Someone could slip on your floor and hit their head on your stove. And you don’t even want to imagine the sheer horror of having a fire spread from your apartment into your neighbor’s.
According to NOLO, the average payout for personal injury cases is $52,900. And while the majority of cases are settled for less, between the legal fees, the time you have to take off of work to defend yourself, and the actual settlement amount, you could be facing a hefty final bill once you’ve tallied up the total cost of the lawsuit.
Renters insurance can step in and pay for both the cost of defense as well as any judgment or settlement amounts if you’re taken to court and sued for property damage or personal injury.
2. Damage to Your Property
Insurance policies can be pretty fickle in terms of what they will and won’t cover. If you’re the type of renter who has traditionally taken the whole “I’ll just rely on my landlord’s insurance.” approach, you might be surprised to learn that many general insurance policies will cover the building and potentially some major appliances.
But your personal property? Not so much. If you’ve got items that are valued in the thousands of dollars, you may be better off taking out a separate policy just so that you can be reimbursed if your belongings are ever damaged by an insured peril.
However, it gets better:
When your property is insured, most policies will maintain that coverage even when you’re away. So whether your stuff is in your car, your suitcase, or your apartment, you may be able to get coverage even if you’re on vacation.
3. Additional Living Expenses
The unfortunate truth about worst-case disaster scenarios is that you can’t control how much damage a fire or a tornado will do. Sometimes the damage is minimal and you can move back in within a week. And other times, the destruction is so bad that the only option you have is to live somewhere else for a while.
According to The Ascent, the median emergency savings amount for Americans is $2,000. And if 2020 has taught us anything, it’s that once-in-a-lifetime pandemics can and do sometimes require you to dip into your pockets a little more.
If you’re like most people, the expenses involved with renting out an Airbnb or moving into a hotel can be costly as it stands. But a long-term rental on top of the current rental would be almost impossible to manage.
When you have a renters insurance policy that also has additional living expenses coverage, you don’t have to worry about how you’ll afford these kinds of costs. From storage fees to rent and even some food-related purchases, renters insurance may be able to reimburse you for it all.
Going Apartment Hunting? Get Renters Insurance!
Apartment hunting is sort of like dating. It takes time to find the right place and the right landlord. Even though no one likes to think about the possibility of losing their home and their belongings in one fell swoop, renters insurance allows you to prepare for the possibility. Plus, if your landlord is the type to require tenants to have insurance, taking out a policy could allow you to go from “I’m looking for a place.” to “I’m picking up my keys.” in less time than you think.
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