Most types of insurance are optional. Probably the two most popular types of insurance are automobile and health. And between the two, automobile insurance tends to be a requirement. Most states require automobile insurance to own (and thus register) a car. Health insurance, on the other hand, is not a requirement by anyone. Renters insurance is not typically legally required, however, some landlords may require it as part of their lease. Despite the myths about renters insurance, it is extra protection for tenants and worth consideration.
Myth #1: Landlord’s Property Insurance is Enough
Landlords have property insurance, which covers the physical structure of the property. It does not cover the tenant’s personal belongings. If a pipe bursts and floods the apartment, the landlord’s property insurance will cover the cost to repair the pipe and any affected building structure (e.g., rotted wood). It will not cover damages the water may have made on a tenant’s furniture, electronics, or clothing. Renters insurance will cover the value tenants place on their personal belongings. Without renters insurance, tenants could face significant financial loss if their personal property becomes damaged due to a covered event.
Myth #2: My Stuff Isn’t Worth Much
Some myths about renters insurance sound logical. Thinking your stuff isn’t worth much can certainly be one of them, especially if you have hand me downs (aka free stuff) or old appliances or electronics. This myth, however, is debunked when you find yourself needing to buy belongings because there was an unexpected event, like a fire, and you didn’t have renters insurance. Now, if you want to replace your stuff, you may have to buy new, which can be costly. Renters insurance would cover the cost to repair or replace your belongings up to your coverage limit.
Myth #3: Renters Insurance is Expensive
Renters insurance is actually quite affordable. In many cases, it is less expensive than homeowners insurance, which has to cover the physical structure of the building. Tenants decide on the type of coverage and amounts of coverage based on the value of their belongings. And increasing the deductible can lead to a lower premium. According to NerdWallet, the average cost of renters insurance is $179/year or $15/month. Premiums will vary based on the state in which you live and coverages.