If your apartment burned to the ground tomorrow, could you afford to replace everything you own?
If you are like most folks who rent, probably not. The truth is, if you rent, you live every day just one mishap away from financial ruin… unless you have renter’s insurance.
Why? Your landlord’s insurance only covers the structure. The stuff inside is your responsibility.
It happened just last week in my friend’s neighborhood. A 36-unit apartment building burned to the ground in minutes. The firefighters got there in record time, but all they could do was keep the blaze from spreading to nearby buildings. 36 families stood and watched as everything they owned turned to ash.
Renter’s insurance is cheap – usually around $20 a month, but it buys priceless peace of mind. Yet, less than half of the renters in the US have it. When disaster strikes, it is up to them to replace everything (clothes, furniture, electronics, jewelry, cookware, etc.) out of pocket. So is a temporary place to stay, all their meals out, and any other related expenses.
So what do they do? Pull out the plastic and max out their credit cards. Then comes a new firestorm of trouble – falling behind on payments, collection calls, judgments, and garnishments. All of which could have been avoided for just 20 bucks a month!
What is renter’s insurance?
Renter’s insurance is an insurance policy you buy to cover your personal belongings in case of loss due to fire, theft, broken pipes, collapsed roof, riot or vandalism, busted hot water heaters, lightning strikes, and other disasters. Renter’s insurance does not cover flood or earthquake damage, but separate policies can be purchased in you need them.
Policies come with many options for coverage, including extra bits called riders that can be added if you have a particularly pricey collection of jewelry, electronics, art, tools, or other belongings.
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Other benefits of renter’s insurance
Liability: If someone trips and falls inside your apartment, they can sue you for medical costs and lost wages. Your renter’s insurance can help cover those medical and legal costs.
Living expenses: temporary housing can be expensive, especially if you have to stay in a hotel for a while. Many renter’s insurance policies come with options for covering living expenses like temporary housing and food.
Losses outside your home: if your camera is stolen or your laptop is damaged while you’re out and about, your renter’s insurance might help pick up the tab for a replacement.
Where to buy renter’s insurance
Just about every insurance company out there carries renter’s insurance. A few good places to start if you are looking for a potential discount are your car insurance company, your landlord’s property insurance company, and, if you are young and just starting out, your parent’s homeowner’s insurance company.
Renter’s insurance is an easy and affordable way to protect your belongings – and your credit score – in case disaster strikes. Thinking ahead can save you thousands of dollars and a very big headache.
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This information is intended for informational and educational purposes only and not as legal advice. If you have concerns about your credit report, harassment, identity theft, illegal collections activity, garnishments, or property liens, you should consult a attorney who specializes in consumer rights and defense.