Should You Buy Renters Insurance? Pros and Cons

The word insurance can send shivers down many a spine. In healthcare, for example, insurance is the divide between paying a modest amount for healthcare and going into extreme long-term debt. In renting, though, insurance is not nearly as dramatic. 

Renters insurance is usually quite modestly priced and straightforward. For a generally affordable monthly or annual fee, renters insurance protects your belongings against even the most unexpected of disturbances. However, only 37 percent of U.S. renters have renters insurance (whereas 91 percent of U.S. citizens have health insurance), so is it truly necessary? Below, find the pros and cons of buying renters insurance.

Pros of buying renters insurance

Safety for your belongings

It can be tempting to see renters insurance as a policy that just covers damage to your home. Renters insurance goes far beyond this. Renters’ insurance covers everything that you own, whether it’s located in the apartment or not. If any of your possessions are stolen, or if your belongings are damaged in a fire or natural disaster, your renters insurance covers that, too. If a fire or natural disaster makes your home uninhabitable, some renters insurance policies will cover your extended stay in a hotel while your home is restored. Additionally, you can purchase extra policies that add enhanced protection for certain categories of belongings, such as electronics, musical instruments, or fine jewelry.

Safety for your assets

Did you know that if someone is injured in your home, you could be held liable and sued? With renters insurance, the legal fees and damage settlement you might have to pay in a lawsuit against you are minimized. If you’re worried about someone taking a fall on your steep, narrow staircase, renters insurance could save you not just money, but time, down the road.

Low cost for huge benefits

As with anything, renters insurance costs money to obtain. However, the overwhelming majority of renters insurance plans cost on the order of just $10 or $15 per month. They may cost even less if you go with an annual option – if you divide your lump sum by 12 (the number of months in a year), you’ll likely get a number smaller than the monthly value you’ve been offered. The monthly fees for renters insurance absolutely dwarf the potential money you would lose in the case of theft, fire damage, or a natural disaster – and it’s likely far cheaper than any health insurance premiums you’re paying.

Cons of buying renters insurance

It’s another cost

Even though renters insurance is inexpensive, it’s still another cost. If you’re really trying to save as much as possible, you may need to forgo even the small monthly fee you put into renters insurance in favor of keeping your budget minimal. Plus, theft is relatively uncommon, as are fires and natural disasters.

Deductibles might be too high

As with health insurance, renters insurance plans come with deductibles. A deductible is the maximum amount of money you’ll have to pay to cover the damages from which your renters insurance plan is designed to protect you. For example, if your $1,200 laptop is stolen, but your insurance deductible is $1,000, then your renters insurance plan will only cover $1,200 – $1,000 = $200 of your purchase of a new laptop. In other words, the benefits of your renters insurance plan may be minimal compared to the amount of money you’ll ultimately pay to secure it – but low, reasonable deductibles are also common.

Do you have renters insurance? Why or why not? Share your opinions in the comments!

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