Should I Buy Renters Insurance?

A question frequently asked by renters is whether or not they should buy renters insurance from someone like This article will help you understand what renters insurance covers and how to get the best value for your policy.

Because the Unexpected Happens

You accidentally leave the water running, you drop something sharp on your leather couch, or in the worst case scenario, your apartment is broken into or vandalized. It doesn’t take much for you to need to replace a valuable item or items. That’s where renters insurance comes in. The reason you have renters insurance is to compensate you for property that is damaged or lost. This policy can make all the difference in how much you will have to pay out of pocket to replace certain items.

However the facts say that less than half of all renters have renters insurance policies, compared to over 95% of homeowners. The reasons are many, but they boil down to two camps. One is that you don’t own “enough” or that what you have isn’t valuable enough. But at a certain point, your possessions have a real value and you have to become serious about protecting them. The other thought is that your landlord will be responsible for damage to your personal property. Bu the fact is, your property manager is only responsible for a small fraction of damage that can occur in your apartment, a fact that is probably spelled out in your lease. In fact, many landlords are requiring tenants to have their own renters insurance policies.

Determine How Much Coverage You’ll Need

Unlike homeowner’s insurance, which uses the purchase price of your house as a starting point, renting is a different matter. You will want to make sure you have enough insurance to cover the full value of anything you want to insure. It’s a good idea to photograph or video your apartment so that you can have a record of the items. The insurer will want to have proof that you actually own the item that you’re insuring. Also, keep in mind that renters insurance provides a general level of compensation.

Another thing to think about is if you want a policy that covers replacement cost or actual cash value. For example, if your couch is 10 years old, the cost of a new couch would greatly outweigh the depreciation that has occurred. So you’ll want to make sure your policy will cover the replacement cost. That same logic applies to specific items such as an engagement ring (and other jewelry), expensive electronics, expensive artwork, or collectibles. You’ll want to make sure these items are specifically covered by your policy. A common practice for items like these is to get a separate rider to your policy as many regular policies are capped at a certain level (typically around $1,000).

Be Sure You Know What’s Covered

According to, you will be covered for different perils. A peril is an event that can cause loss or damage to property.

The “named” perils in your renters policy may include:

• Fire or lightning

• Damage from high winds

• Smoke damage

• Vandalism

• Theft

• Water Damage (Accidental Discharge)

Make sure you understand what perils are covered. You will definitely want to make sure your policy covers fire and flood damage. Storm damage is also a good idea as lightning strikes can easily damage a television or computer.

Another thing that your renters policy includes is liability protection. In a society that looks for any reason to sue you, you need to consider what would happen if someone is injured on your property. Would you be able to pay legal fees? Your renters insurance can help with that.

It can also help with medical payments coverage. This would cover guests who don’t live with you, but who are injured on your property.

How to Get the Best Price

One of the best places to shop for renters insurance is through the agency that carries your auto insurance. Bundling your policies will generally result in a better price on both. Another area where you can increase your savings is by increasing the size of your deductible. A deductible is the upfront cost you pay before your insurance company will start to pay for losses. A high deductible will leave you with more responsibility to cover your own losses, but that’s when you have to remember that insurance is protection against what may happen, not what will happen. Insurance companies will be happy if you agree to share that risk.