Is renter's insurance really necessary? Ask the majority of renters that question and you'll get a resounding 'no'. Most renters feel they don't need insurance because the odds are in their favor. They feel it's too expensive or their landlord has insurance. Let's look at each of these thoughts to decide if renter insurance is necessary.
1. The price of no renters insurance
Consider this scenario. It's 3:00am. You hear screams, loud footsteps, and the sound of pounding on doors. As you slowly awaken, you suddenly smell smoke. Looking outside, you see scared and confused neighbors huddled in the parking lot and go out to check.
Sure enough, one section of the apartment complex has caught fire. You think help will arrive before it reaches your apartment, but it doesn't. You leave with nothing but your pajamas and a few food items donated by the Red Cross.
Still think you don't need renter's insurance?
2. 'I don't need insurance. Nothing will happen'
According to the Bureau of Justice Statistics, renters are burglarized 50% more often homeowners are. If you don't want to get renter's insurance because you feel the odds are in your favor, they're not. Add in the added risk of living in close proximity to others in a condominium or apartment complex. If they have a kitchen fire or leave a candle burning and their place catches on fire -- so does yours.
3. 'My landlord is insured.'
Yes, your landlord is probably insured but this won't help you. The landlord's insurance covers damage to his property -- not yours. In the event of a fire, his insurance will replace his building, but not your personal possessions. You leave empty handed.
4. 'Insurance is too expensive.'
To find reasonable renter insurance, you have to shop around. It is possible to find insurance for renters around $10 - $12 per month. If you're like most people, you easily waste this amount on unnecessary items each month.
Your premium depends on the company you choose, your location, and the amount of coverage you need, but by shopping around, you can find a reasonable plan. As a renter, you'll need a HO-4 policy. Condominium owners need a HO-6 policy. These policies cover such things as:
- Smoke damage
- Accidental discharge of water
If you live in an area prone to earthquakes or floods, you may need to take out additional coverage.
No one likes to pay insurance, but the safety of your family and recovery of your possessions in the event of disaster is too important to be without renters insurance.