Insurance is one of those things that you really can’t live without. It is required to drive a car, can make a huge difference on medical bills if you fall ill, can protect your home in disastrous weather or as part of a condition of your mortgage agreement. The point is, for different areas of life it is a requirement not a choice. dsfd

But if you don’t own a home and are renting an apartment, is renters insurance something you need? The simple answer is typically yes. Not only do many landlords and buildings require renters to have renters insurance, it is just a smart idea for so many reasons as well. Let’s look at the benefits and drawbacks of renter’s insurance before you sign anything.

What is Renters Insurance?

To put it simply, renters insurance is insurance on your belongings and other things within a rented apartment space. As you don’t own the building, the insurance protects your contents and belongings from theft or damage due to a wide range of reasons. If your apartment is broken into and things like jewelry, entertainment systems, computers, clothing, or anything else of value are taken; renters insurance can pay you for the estimated value of the stolen or damaged goods. Even outside of your apartment you can be protected. If you lose your laptop at the library or lose your handbag in the grocery store, your renters insurance may cover it.

It can go a step further as well. Renters insurance also provides liability protection. If someone is visiting and slips and falls on a wet kitchen floor in your apartment, your renters insurance can cover their medical expenses so you’re not paying out of pocket following a suit. Even if you have a dog that bites someone who must be hospitalized, your renters insurance can cover the medical expenses.

As you can see there are a few key protections that renters insurance provides. But let’s take a closer look at the benefits and drawbacks.

Benefits of Buying Renters Insurance

We listed some of the benefits above, but here is a more comprehensive list.

  • Covers your belongings from events or damage from: fire, smoke, windstorms, water damage, theft, vandalism, lightning and more.
  • Can provide a hotel following a disaster or reimbursement of hotel costs following a disaster.
  • Liability insurance to cover injuries or damage to your property caused by family members like your kids.
  • Coverage of medical expenses for injured guests.
  • Coverage of legal costs if you’re sued.
  • Some policies cover liability and medical expenses for dog bits (check your policy specifically)
  • Protection for your belongings when you’re “off-premises”.
  • Cost is typically extremely low per year for most renter’s insurance policies making them affordable for most renters.

This is a pretty comprehensive list of the ways in which renters insurance can protect renters. Remember that every single policy is different and not all of them will cover all the items listed above. Be sure to check your policy coverage policies and when shopping around be sure to look for policies that include these or let you pick and choose what coverage you need.

Drawbacks of Buying Renters Insurance

Despite the long list of benefits to having renters insurance there are also some drawbacks (albeit a shorter list). Let’s take a look:

  • Costs to the policy can be one of the biggest drawbacks. If you pay for your policy for 3 years, month in and month out, but never need to use the policy it may feel like thrown away or wasted money. (That is always a drawback of insurance, you spend money on something you may never use.)
  • ACV or Actual Cash Value: should you need to file a claim, the insurer will only pay out equivalent cash value of today on a certain item. If an old television that was expensive when you bought it ten years ago is only worth 1/10th of the price today, you’ll only get that percentage. Items like technology lose value quickly so this is a drawback.
  • Earthquakes and floods: Standard renters insurance policies do not cover earthquakes or floods. Despite covering 17 types of inclement weather, these are not usually included and may require a separate piece of insurance, especially if you live in a high-risk area.
  • Expensive items may not be covered by all policies or require additional policy or insurance premiums to offer protection.
  • Deductible: A deductible is an amount you must pay when the insurance kicks in. If you’re deductible is worth less than your damaged or stolen possessions it could be cost prohibitive. Consider a $2000 deductible and a $2000 damaged or stolen Apple laptop computer. If this is the only real thing of value, then your insurance policy may not be worth it. As you must pay $2000 to get the $2000 reimbursement, meaning no help at all. So be sure to look at the deductible of any policy, try to go lower and you’ll have higher monthly premiums. Finding the right policy with a good balance is key.

Verdict: Buy Renters Insurance

We’ve seen a short list of benefits and drawbacks to buying renters insurance. Our verdict is that because of its low costs per year, because of its high range of benefits should you need to use the policy, buying renters insurance is a smart choice. Not only do many landlords and buildings require their tenants to have renters insurance, it has a range of benefits should you need to use it. Be sure to shop around and find a policy that suits your budget and specific insurance needs. You can even bundle renters insurance with other types of insurance in some cases keeping your costs lower. Shop around and get renters piece of mind today.