It's a lot cheaper and covers a lot more than you think
What do family heirlooms, your laptop and the undead have in common? If you’re a renter, quite a lot — at least according to a recent Nationwide Mutual Insurance Company survey.
The survey asked more than 1,000 renters about their biggest fears. The two biggest were “fire” at 41 percent and “theft” at 31 percent. Fortunately, only 3 percent said “the zombie apocalypse.”
Whether they’re running from a horde of flesh eaters or another more likely disaster, 24 percent said they’d save their laptops before anything else — including family heirlooms.
But the most surprising result was this: 70 percent of those polled had rented for three years or more, but 56 percent did not have renters insurance. Most blamed many common myths — from high cost to a lack of coverage — for not having renters insurance.
Let’s separate fact from fiction…
1. Myth: My landlord will cover me
While your landlord has insurance, that policy only covers the building itself — not your stuff.
Say, for example, the building catches fire. The landlord’s property insurance would pay to repair the damage to the building and the individual units. You’d be responsible for replacing your furniture and possessions — and finding a place to live while the repair work is being done.
If you have renters insurance, you can file a claim to replace your lost items. Many policies also cover temporary lodging.
2. Myth: Renters insurance is expensive
Many renters skip renters insurance, thinking they won’t be able to afford it. But monthly premiums are surprisingly low.
“A common $20,000 personal property coverage with $100,000 of liability based on $1,000 deductible should range around $20 per month for most of central North America,” says Chris Michaut, an insurance agent with Williamson Insurance in Ohio.
Many insurance companies also offer discounts. For example, if you insure your car and your rental property with the same company, both policies will cost less.
3. Myth: It won’t cover all my stuff
There is no one-size-fits-all rule to renters insurance. To make sure you’re not going underinsured, Michaut says, “Stop thinking about the big items and go directly to your small items.”
The little things like clothes and kitchen gadgets can really add up. If you realize you need more coverage, don’t worry about busting your budget. “The difference from $20,000 to $30,000 is usually $5 to $8 per month,” he says.
4. Myth: It’s hard to get insured
If you’re new to carrying your own insurance, the process of applying and starting a policy can seem daunting, maybe even too much to handle. It really isn’t. All you need is some basic information, your address, and maybe proof of income. In most cases, you can apply and get approved online.
5. Myth: If a natural disaster happens, I’m out of luck
Your insurance company will cover you for most natural disasters. According to Michaut, most insurance companies cover 17 common perils including:
However, he warns, “Flooding is not commonly offered by most companies, and earthquakes can be limited depending on location.” If you live in an area prone to either, you might want to consider getting an additional policy designed specifically for those disasters.
6. Myth: I can’t file a claim for accidents
Mistakenly, 30 percent of the renters in the Nationwide survey insisted renters insurance never covers them for damage if they or a guest were at fault. In reality, your renters insurance may cover you if your property is damaged during a party, or if you do something silly on your own. To make sure, ask your insurance agent if “accidental damage” is covered before you sign up.
7. Myth: If I’m robbed, the insurance company won’t pay
Renters insurance covers losses due to theft. If you come home to find your valuables missing, you can file a claim. Your renters insurance will also cover you if your personal belongings are vandalized — say, for example, your furniture was trashed while the thieves were looking for high value items.
8. Myth: I need to save my laptop
While a good number of renters think they should save their laptop above all else, “Each insurance company has a way to cover electronics,” Michaut says. The only time you’d need to worry is if you have a very expensive gaming computer that exceeds your normal policy amounts. For that, you may need an additional rider to cover the extra cost.