You might think that renter’s insurance isn’t necessary. But it is always worth it. Even high-net-worth individuals (HNIWs),
many of whom prefer to stay in rental properties, purchase this type of insurance to protect themselves from untoward expenditures. But wait, what is a renter’s insurance? Let me help.
When you rent a residential property, you’ll need to cover your personal assets. Landlords usually have property insurance that covers only the building. So, you’ll need renter’s insurance to safeguard the personal items that come with you.
You might think you don’t need it, but you should get it. It protects you from all potential scenarios that can make your rental experience difficult. But let’s take it up point-by-point.
Here’s why you should buy renter’s insurance:
- What does it cover?
Broadly, a renter’s insurance policy provides three covers, and they are pretty significant:
- It covers your personal items in the rented property. In the event of these items getting damaged or destroyed, your insurer will cover the damage up to the limits in the agreement.
- A non-resident gets injured at the place, and the insurer will cover the costs, including loss of wages and medical expenses. There’s also protection for those who suffer minor injuries.
- In case the rented property becomes challenging to live in, causing expenditure of additional living costs, then the insurer will cover the extra costs incurred.
- There’s a policy for different renters
What’s attractive about the renter’s insurance is the array of renters it offers protection to. For instance, the liability coverage includes renters with pets. If their pet causes medical injury, the bills could be covered. Likewise, individuals with a high net worth can benefit from the policy as it can cover expensive furnishings and other personal items. College students also benefit from the insurance policy as they cover valuables such as sports equipment and electronics.
Of course, the cost of a renter’s insurance policy varies with factors. But, you might think these policies are expensive considering the relatively low uptake. However, quite the contrary, these policies are comparatively affordable.
In the US, the average cost of a renter’s insurance is 179 USD annually, which should amount to 15 USD monthly. The cost in the US could go as low as 101 USD and as high as 261 USD on average.
- Landlords may require it
You might forego purchasing the policy, thinking the landlord’s insurance would cover the damage. But not necessarily. In fact, and as is happening quite a lot lately, landlords often only admit renters with insurance policies. Many times, the insurance companies of the landlords dictate the presence of such an agreement from the renter’s side.
And, as the cost of living keeps touching a new baseline, you might want to reconsider buying a house with a mortgage from hell. And renting a place may be the ideal option until you can manage the burden.
- Which policy should you go for
There’s no fixed answer to the question. It depends on the variables. But, the standard practice is to purchase a policy with 30,000 USD in property coverage and 100,000 USD in liability coverage. But, before you go ahead with anything, it is best to create a list of personal items you don’t want to lose.
Also, in case you’ve more than a particular policy can cover, you may want to increase the coverage limit through an endorsement. That being said, it is advised to seek professional help, compare prices and coverages across policies, and then choose your policy.
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