Insurance is one of the more baffling topics that adults have to deal with. It’s annoying for some that it’s a legal requirement to have health insurance and car insurance, and about 57% don’t bother to get any renters insurance when they live in an apartment. For the rest who do have insurance, they may not be fully aware of what it’s really all about.
So let’s dispel a few myths that somehow have become popularized over the years. These beliefs about renters insurance are absolutely not true at all:
- The landlord pays for the insurance. Yes, the landlord pays for their own insurance. But their insurance protects them and not you. So if your apartment complex burns down, the landlord’s insurance will help pay for the repairs on the building. It won’t help you replace your belongings that were damaged or destroyed in the fire.
In fact, more and more landlords are requiring renters insurance before accepting potential tenants. This is to protect not just your belongings but also to protect the landlord’s assets. Their premiums also go down and they won’t increase because the insurance requirements lead to fewer claims by the landlord.
- It’s expensive. Some people seem to think that it costs as much as some health insurance policies. That’s not really the case. The average cost is less than $300, and that’s per year. That’s $25 a month, or less than a dollar a day. Lots of people spend more on soda or coffee.
So you need to factor it in your budget. Paying $25 a month is nothing, compared to the feeling of financial security you get.
- People think that they don’t have enough items to justify the insurance. People are naturally acquisitive, and that’s a trait that’s exclusively for homeowners only. Even if you live in a small apartment, if you check every possession you own then you’ll find a lot more stuff than you may realize.
- They don’t think they need insurance because their belongings aren’t expensive. That may seem true, but if you add the costs of replacing all your clothes then you’ll realize you’re worth more than you’ve suspected. The shoes, watches and other pieces of jewelry can be expensive to replace.
That’s not even mentioning the home electronics and furniture in your apartment. Do you really think it’ll be easy to replace your TV, computer, laptop, and smartphone? Then you will also need to think about your appliances in the kitchen. Refrigerators and ovens are expensive, and if you lose everything you’ll also have to buy a microwave oven, blender, and coffee maker.
Furniture pieces are expensive as well. Your bed, couch, and dining tables and drawers will cost you a fortune if you have to replace them all in one go.
- The policy protects them against property damage caused by earthquakes and floods. Sadly that’s not the case. Usually, you’re protected against fire and theft, and perhaps against leaky water pipes. But floods and earthquakes aren’t part of the deal. If you want protection against those disasters you need to take out a separate insurance policy.
- The protection applies if you’re running a business at home. It doesn’t matter of lots of people work at home. If you do, and your work leads directly to the property damage, then you’re out of luck. If you’re running a catering business in your apartment kitchen and your cooking appliances causes a fire, the insurance won’t cover it.
So read the policy carefully when you buy renters insurance. Don’t assume, and instead find out for sure what your policy entails when disaster strikes!