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A poll by the Insurance Information Institute on behalf of ORC International in 2015, found that only 40 percent of U.S. renters have renters insurance. This is opposed to the 95 percent of homeowners who have invested in homeowners insurance.

Many renters fail to understand the importance of renters insurance. They assume that their landlord’s insurance will cover them too. However, your landlord’s insurance only covers damage to the property. It doesn’t cover you or your property.

It all adds up

Many renters won’t take out renters insurance as they believe their property isn’t valuable enough to insure. However, it all adds up. The average renter has various valuable belongings such as:

  • Furniture
  • Clothing
  • Entertainment systems including TVs, stereo systems and Blu-Ray players  
  • Dishes, cookware and silverware
  • Electrical appliances including washing machines, dryers, microwaves and dishwashers
  • Artwork, collectables and decorations

The fact that you’ve collected these items over many years makes them seem inexpensive or worthless. However, all of these items can be destroyed or damaged in a disaster, such as a fire. They can also be stolen. It would cost you tens of thousands of dollars to replace all your belongings.

Renters insurance covers more than property

Renters insurance covers much more than just your belongings in your rented apartment. A good insurance policy will also cover other expenses such as:

  • Medical expenses

Accidents can occur in your rented apartment. You will be held liable for the medical expenses resulting from the injuries to other people in your apartment. Renter’s insurance will cover the medical costs of these injuries.

Renters insurance will also cover medical expenses resulting from the treatment of injuries inflicted to other people by your pet.

  • Liability

If a guest is injured and you are held legally responsible, renters insurance will cover the cost of resolving the claim or defense against the lawsuit that was brought against you.

  • Items stored off site

If you have property stored off the premises, your renters insurance policy will cover the property to a limited extent. The insurance provider will give you compensation of up to 10 percent of your insurance policy’s value. If your insurance policy is for $20,000 for example, you will be covered for up to $2,000.

  • Lost luggage

If your luggage is stolen or damaged while traveling, your renters insurance policy will cover the cost of the loss.

  • Cost of relocating

If your current home is destroyed by water damage, fire or any other disaster and declared unlivable, your renters insurance will cover the cost of temporary accommodation during the transition.

Additional facts about renters’ insurance policy

The National Association of Insurance Commissioners puts the average cost of renters insurance at between $15 and $30 per month. This is much more affordable than having to cough up thousands of dollars to replace your property. And with easy renters insurance comparison options, you can find a great deal on insurance with little effort.

Insurance policies differ not only in the amount of coverage offered but also the type of coverage provided. Actual Value coverage provides compensation based on the value of the items. This is subject to depreciation. Replacement Value coverage provides compensation on the basis of the cost of replacing the items.

Not all incidents are covered by renters insurance. Many policies do not cover flooding and earthquakes. You will have to purchase a separate policy for this type of disaster. Renters insurance also doesn’t cover damage caused intentionally or due to gross negligence by you. You should therefore avoid smoking in bed or leaving the taps running unattended.

Be sure to do your research before you purchase an insurance policy. Your policy should provide coverage that meets your specific needs and requirements.

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