Renter’s insurance: got it? get it.
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Because of that our sponsors are a good fit for the topic of frugal living, and so they often remind me of worthwhile topics. We have a new sponsor this week in our Recommended Links area, and the website reminded me of our own experience (or lack thereof) with renter's insurance.
OUR STORY
My husband and I rented a home for the first 5 years of our marriage. We knew nothing about renter's insurance. To the best of my knowledge, nobody ever suggested it to us, and of course we didn't go looking for what we didn't know existed.
After 5 years and 3 children, we bought our first house and carried regular homeowner's insurance as required by the bank. We even used it once or twice, and were pleasantly surprised to learn that unlike auto insurance, you are not automatically hit with a rate hike when you place a claim. If those incidents had occurred while we were renting, we would have been out of luck.
After another 5 years and 3 more children, we decided to try our hand at life as landlords. We did some research, looking at plenty of sample leases. We quickly learned that many landlords strongly recommend or even require their tenants to carry something called renter's insurance.
I'm not sure I would recommend getting into the rental property business - we lost a huge amount of money when our town imploded - but I do heartily recommend renter's insurance to anyone who rents their home.
Renter's insurance typically covers personal belongings damaged due to theft, vandalism, lightening, hail, wind, power surges, water-related damage from home utilities, and much more. We had sewer pipes back up into our home not once, but twice, in the space of less than 3 years. Two different houses. Once resulted in toilet water and shower water from the couple upstairs flowing out of my shower drain, flooding my bathroom and creeping out onto my bedroom floor. That was bad enough, but the other was far more dramatic. These things happen.
BOTTOM LINE:
We all know that there's nothing frugal about being over-insured. Don't pay for more coverage than you need. But please consider fitting renter's insurance into your budget. Coverage starts at about $10/month, and in our experience it's worth the risk.
And if you're going to look into it, consider giving our sponsor a click to search 6 of the best-known insurance companies at once.
YOUR TURN:
If you rent, do you carry renter's insurance? Do you know about renter's insurance? Have you ever made a claim with homeowner's or renter's insurance, or been in a situation where you could have used the coverage?
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16 Responses to “Renter’s insurance: got it? get it.”
March 4th, 2010 at 8:54 am
We live in military housing and carry renter’s insurance. It’s ridiculously cheap (~$30/month for up to $400,000 in coverage) through USAA for military members. My peace of mind is worth WAY more than $30/month!
I’d recommend looking to your auto insurance company for renter’s insurance. You can get great deals by combining the two. If your auto insurance company doesn’t offer renter’s insurance, shop around and find a reputable company that does both.
March 4th, 2010 at 9:29 am
Renter’s insurance is CHEAP, too – $10,000 worth of coverage for $100 a year is what we’ve paid before(brick building); we pay more now we live in Hurricane Country but it’s still relatively cheap.
We get ours through our car insurance company, and then we get a discount on our car insurance.
Also – there are two types. Get REPLACEMENT value, not actual value. And if you think you don’t even have $10,000 worth of stuff, imagine that you may be replacing ALL of your clothes (down to socks and undies), beds, toothbrushes, spoons, EVERYTHING if your house should burn down or something.
March 4th, 2010 at 9:53 am
We rented until we could save our down-payment, and of course we had tenant insurance. You might think that you don’t need it…but who knows if the tenant in the apartment beside you will fall asleep while smoking in bed? Or leave a candle lit overnight? You can’t be too safe.
March 4th, 2010 at 10:18 am
we are currently renting a house and renting out the house we own. we have insurance on both, you never know when you will need it.
a month or two before we were married my then fiance’s house was broken into and robbed. he didn’t have insurance and lost almost everything of value. i think that’s when we both learned about renter’s insruance. i wouldn’t rent without it and it’s fairly inexpensive.
i would agree with a previous poster that you need to have replacement value vs actual value.
March 4th, 2010 at 11:14 am
We are currently renting and we have renter’s insurance. It is relatively cheap compared to regular home owner’s insurance. I highly recommend it because you never know what kind of policy the homeowner has.
March 4th, 2010 at 1:03 pm
Equally important is flood insurance for renters. Just as homeowners insurance will not cover floods, renters insurance does not cover floods. If you’re on a first floor, or on a second floor in a flood plain look into it.
March 4th, 2010 at 1:04 pm
We rented out our house when we moved due to a new job and could not sell it. Got our insurance changed to rentee’s insurance and am so grateful we did. Found out about 6 months in to the lease that they were using our house as a marijuana grow house. yuck! If we had just left our regular covereage in place nothing would have been covered. But since we did, the $85-$100,000.00 damage they did will be covered. Thank God.
March 4th, 2010 at 4:17 pm
I once rented in an apartment complex that required tenants to have renters insurance. Mainl so their losses would be covered if I damaged the property.
March 5th, 2010 at 9:56 am
The management company that ran our first apartment required us to carry $25k in renters’ insurance, but when they upped the minimum to $50k (along with increasing our rent by $400 in one year without doing any repairs), we moved. Our next landlord required us to carry $15k, which is much closer to the actual value of our stuff.
March 5th, 2010 at 12:30 pm
Hmmmm…. I guess I’ll be the lone voice of dissent here and say that we (my husband and I) chose not have renters insurance when we lived in an apartment for four years (2005-2009). And we feel it was the right decision.
When we looked around our apartment and thought about what we’d be insuring, it didn’t really make sense to us. We thought about the worst case scenarios (of fire damage or theft) and discussed what we’d do if those scenarios happened.
If we needed to replace absolutely everything, it wouldn’t have been too expensive, since nearly all of our belongings came to us second-hand. (clothing, kitchen pots/plates, books, furniture, childrens’ toys, etc.) It would have been a major hassle, but it would be a major hassle whether or not we had insurance.
The items which we couldn’t replace easily second-hand were irreplaceable (photo albums, heirloom engagement ring, etc.) and if those items were destroyed or stolen, no amount of insurance money could bring those items back.
Now that we own a home, we do have homeowner’s insurance (on the building itself) as a condition of our mortgage. We feel this is appropriate since we’re insuring the structure itself.
March 6th, 2010 at 7:37 am
My renter’s insurance is half that–we pay about $62 a year.
March 6th, 2010 at 11:36 am
Another consideration for having renters insurance is the liability coverage that is included with the policy.
Most renters are aware that the landlord’s insurance policy doesn’t cover their possessions.
If a claim is made on the landlord’s policy and it can be proven that the renter caused the loss, the landlord’s insurance company has the right to pursue recovery of the amount they paid out from the renter.
Not all insurance companies will pursue damages, but some will. If the renter has a renters policy, the liability coverage from the policy would reimburse the landlord’s insurance carrier.
March 6th, 2010 at 10:48 pm
Just an FYI – there are many insurance companies out there that will not insure you when you’re buying a home (after renting a home) if you didn’t have renter’s insurance for at least 6 months. Some even require that you’ve had it for longer. I worked with a homebuyer that didn’t have it AND had some credit issues and they couldn’t get insured….couldn’t buy a home for 6 months!
March 7th, 2010 at 6:19 am
I work for a major insurance carrier and I talk to people everyday about how important this coverage is. I see people constantly that loose everything and had no idea that for less 10.00 a month all their belongs could be replace, not to mention most of those policies have something called lose of use which means your insurance carrier will pay to put you up somewhere else while your residence is being repaired and/or you are finding a new place to live.
March 8th, 2010 at 11:42 am
Yes, we have renters insurance. My husband and I started renting our current apt about a year ago, and almost immediately got renters insurance?
Why? We wanted our possessions to be protected in case of theft,water damage,or other situations that may arise
How Much do we pay? $11 a month.
$11 a month is so worth it as a protection plan in case something happens.
I highly recommend it!
March 20th, 2010 at 8:48 am
We are also Military and use USAA. I would like to add that when our stuff is being moved, USAA is also covering our stuff. That is peace of mind that is so worth it for us.
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