The $15 insurance policy all renters need

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The $15 insurance policy all renters need
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More than one in three of us now rent a home instead of owning, according to the National Multifamily Housing Council. That makes renters insurance a necessity, though few renters are willing to purchase it.

Read more: Man faces eviction after landlord hikes rent by 350%

Why you need renters insurance

Renters insurance typically costs around $10 or $15 per month. But it will cover your belongings in the event of theft, fire and other disasters — though not flooding. (For floods, you’ll need to buy a separate policy, which is especially important for homeowners.)

At around $15 or $20 a month, these policies are very affordable — expect to pay no more than around $250 a year maximum.

The most common reasons that renters don’t want to shell out for it is that they think their belongings aren’t that valuable. But if your belongings are stolen, damaged or destroyed, do you have enough money to cover that expense of replacement? Many people don’t. That’s why this kind of insurance is advisable.

Another common objection is that renters think the landlord is responsible for damage to their belongings. Not so.

The sole exception is in the case of ‘negligence,’ which is very hard to prove. So you’re on the hook if your belongings are stolen, damaged or destroyed in a fire, or what have you. That’s where renters insurance comes in handy.

What specifically will renters insurance cover?

According to Insure.com, the perils these kinds of policies will cover include:

  1. Fire or lightning
  2. Windstorm or hail
  3. Explosion
  4. Riot or civil commotion
  5. Damage caused by aircraft
  6. Damage caused by vehicles
  7. Smoke
  8. Vandalism or malicious mischief
  9. Theft
  10. Volcanic eruption
  11. Falling objects
  12. Weight of ice, snow, or sleet
  13. Accidental discharge or overflow of water or steam from within a plumbing, heating, air conditioning, or automatic fire-protective sprinkler system, or from a household appliance
  14. Sudden and accidental tearing apart, cracking, burning, or bulging of a steam or hot water heating system, an air conditioning or automatic fire-protective system
  15. Freezing of a plumbing, heating, air conditioning or automatic, fire-protective sprinkler system, or of a household appliance
  16. Sudden and accidental damage from artificially generated electrical current (does not include loss to a tube, transistor or similar electronic component)

What won’t it cover?

  • Floods
  • War
  • Nuclear hazard
  • Neglect, meaning your failure to save your property at the time of loss or after
  • Intentional loss, meaning your intentional destruction of your property
  • Governmental action, such as seizure of your property

The $15 Insurance Policy All Renters Need

Where should you buy renters insurance?

When you’re ready to buy renters insurance, be certain that your policy includes relocation assistance and replacement value coverage. The latter will help avoid protracted battles over the price of depreciating assets like old electronics. You’ll just get one lump payout to replace your items rather than having to haggle over the depreciated value of your three-year-old TV.

Try getting quotes for renters insurance from the same insurance carrier that writes your auto insurance policy. See a list of the best auto insurance carriers here.

In general, you want to do this shopping on your own, rather than through your apartment complex, because that’s a real profit center for them and you’ll generally find better quotes when you shop that way.

When you get your policy in place, be sure to make an inventory of your property. Note the makes and models of electronics. Keep receipts when you buy something new.  Taking a video on your phone as you walk through your apartment and naming what you have is a great thing to do too.

If you have particularly expensive electronics, you may want to consider purchasing a separate rider for those items.

Read more: Woman finds her own house for rent on Craigslist

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Theo Thimou About the author:
Theo is director of content for clark.com. He has co-written 2 books with Clark Howard, including the #1 New York Times bestseller Clark Howard's Living Large in Lean Times.
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