5 Renters insurance policy myths

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5 Renters insurance policy myths

More than half of all home renters in the United States (57 percent) do not possess a renters insurance policy, often due to misconceptions that steer them down the wrong path.  We all understand the value of homeowners insurance, but many renters assume that they don’t need renter’s insurance because they do not own their own residences, or that they don’t own enough “stuff” to need insurance.  This could not be further from the truth.  Renters insurance is every bit as valuable and necessary as homeowners insurance, and it’s far more accessible and affordable than a homeowners policy.

Renters insurance typically provides coverage for the following situations:

  • Personal property– furniture, computer equipment, electronics, clothing, and other valuables
  • Personal liability –if someone is hurt or their personal property damaged
  • Damage to your rented home caused by the renter’s negligence – a good example would be leaving your iron on and causing a fire.

With this in mind, let’s clear up some common misconceptions surrounding renters insurance and its value:

  1. I don’t need renters insurance because my landlord has it covered. Part of that statement is true, but it is also quite misleading when taken out of context. Your landlord does have his or her own insurance policy in place, but it only covers the structure itself. It does not cover anything inside the apartment or home you’re renting, including all of your belongings.

    Let’s say a fire burns your apartment to the ground. Your landlord’s policy will cover the cost of rebuilding the structure and any injuries you incurred during the fire, like being hospitalized for smoke inhalation. But, it will not cover the cost of replacing any of your belongings, furniture, electronics, clothes, appliances, etc. that are destroyed in the fire. Your renters insurance policy, however, would cover all of those costs.

  2. I don’t need renters insurance because my roommate has it covered. This seems like sound logic, and credit to you for choosing a roommate smart enough to have his or her own insurance policy. However, your roommate’s policy will only cover his or her belongings, not yours. As a result, you are still vulnerable and your possessions are still not covered by insurance.  You need your own renters insurance policy or you run the risk of paying to replace everything you own out of pocket.
  3. Renters insurance only covers the things I own. Once again, this only paints part of the picture. Yes, renters insurance covers all of your belongings in case of a catastrophe, but it also covers more.

    Let’s say your bathroom floods causing water damage in an adjacent apartment. In this situation, your renters insurance policy would not only cover the cost of repairing damage to your apartment, but the cost of damages to your neighbor’s apartment as well, up to the policy limits.

    Now let’s say a friend visits, trips over a loose rug, and falls and breaks their ankle. Your rental insurance policy covers the replacement of your possessions, but it also includes liability coverage which will cover medical and other costs in the case of an accident inside your rental apartment or home. Without renters insurance, you’d be paying these costs out of pocket.

  4. I can’t afford a renters insurance policy. If you can afford to go to a movie, then you can afford a renters insurance policy.

    According to the Independent Insurance Agents and Brokers of America, you can acquire a renters insurance policy with $30,000 of property coverage and $100,000 of liability coverage for about $12 per month. That translates to about 40 cents per day.

    Weigh that cost against replacing everything you own in your residence, out of pocket and the value and peace of mind that renters insurance affords you is obvious.

  5. My insurance company will just take my word for it. This is the most common misconception among people who already have a renters insurance policy. Many think that simply acquiring the policy is good enough, but if your insurance company doesn’t have proof of what you own, you could run into issues at the time of a claim. Especially if you have you have unique or high value personal items.  This is why it is so important to maintain a home inventory in case of burglary, fire, flood or other natural disaster destroys your belongings.

The insurance professionals at Foundation Insurance Group are always here to assist you. We’ll review your current renters policy, answer your questions and concerns, and partner with you to protect your property.   We know your belongings are important to you, so we’ll help you protect them from the worst this world can throw your way.

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