Spending extra money on a rental is not something most people want to do. However, the value that renters insurance offers outweighs the cost. Learn more about renters insurance and how to budget for it.
The Financial Benefits of Renters Insurance
Financially, the benefits of renters insurance could be worth thousands if you have to make a claim for damages. So what is covered by insurance?
Certain things are covered by the landlord. The structure of the building where you rent is under the landlord’s insurance policy, but your personal property is not. It also does not protect you if a guest in your home is injured and sues you for liability.
Your personal property will be protected from certain types of loss. It also provides you with liability protection in the event you injure others or damage others’ property.
Here are some of the ways this insurance offers financial protection:
- Fire, smoke and/or water damage
- Building collapse due to weather
It also helps with temporary housing assistance should you become displaced during the event of a loss. If you want to make sure you and your belongings are covered, renters insurance is a must.
Renters insurance does come with a few negative points to consider. There is a premium every year that you will have to pay. If you never use the insurance, it could seem like a waste of money. However, the coverage of major losses can save you big time. As with most insurances, your policy will include a deductible. A high deductible means a less expensive policy; a low deductible means a more expensive policy.
Think through the value of your possessions verses the cost of insurance as well as if the landlord requires you to have renters insurance.
Budgeting for Renters Insurance
There are a few ways to budget for renters insurance. One way is to spread the cost over the entire year. If your policy is $120 per year, each month you would budget $10 towards your premium.
There may be financial incentives to pay the entire premium at once. Make sure you have the cash in your account to cover it. If it’s your first time purchasing renters insurance, your budget will be more prepared to handle that cost the following year when it renews.
Renters insurance is typically very affordable, costing around $100-300/year. To start the process, contact insurance agents, and shop around for quotes. Most of all, ask about discounts you may qualify for, and find out about coverage limits and premiums.
The best case scenario is that you won’t have to make an insurance claim, and you are only out $100 instead of having no insurance and potentially losing thousands of dollars. Finally, always think through your own personal situation and do what best suits you and your family.