You aren’t required to buy renters insurance, but there are many reasons why you should. It’s a small added expense that could save you from these costly risks.
As the American Dream of homeownership steadily becomes a nightmare, more Americans are renting, and thus paying more, for housing.Floor plans and bank accounts remain squeezed as families and singles attempt to keep up with bills for rent, car insurance, groceries, and other unexpected expenses.
This constant struggle to simply break even leaves nothing for a down payment on a house or the hope to move up. But why has homeownership become so out of reach for most Americans in recent years?
The housing market has reached its highest sale pace in 6 years, according to the National Association of Realtors.
Even though the market is improving, it’s leaving many Americans unwilling to keep up with the price. When homeownership becomes out of reach, the cost of rent does too, forcing many low and middle class American’s to cough up a large portion of their income for housing alone.
Harvard University’s Joint Center for Housing Studies has reported that currently 35% of U.S. residents rent property, while homeownership has declined from 69% to 63.7% in the past 8 years.
With more Americans renting now than ever before on extremely tight expenditures, there is no room for risk. Renters could lose everything in the case of a burglary, fire, or flood. And without the proper insurance, financial recovery could take years.
If renter’s insurance can cover your belongings and finances, why do less than 33% of renters age 18 to 29 have it?
There is a stigma surrounding the legitimacy of renter’s insurance. Many believe nothing will ever happen to their property or they don’t believe their possessions are valuable enough to insure.Most believe renter’s insurance would just be too expensive.
Overall, these impressions are largely based on misunderstandings. So to clear it up for renters, here are 9 reasons you should get yourself covered.
Reasons to have renter’s insurance
- It’s affordable With all the household bills to keep up with these days, adding on another for renter’s insurance seems unreasonable. However, the average annual cost of renters insurance in the United States is only $188, according to the National Association of Insurance Commissioners. Most insurance companies even offer a significant discount when you bundle your renters insurance with another policy, like auto. Renters insurance becomes more expensive if you wish to cover collectibles or pricey antiques. You should also keep in mind that if you live with roommates, each individual will have to purchase their own policy to cover their personal belongings.
- You can’t predict the future As much as being psychic would come in handy when it comes to buying insurance, no one can predict what the future holds for their personal property. We’re often oblivious to just how many personal possessions we own, such as clothes, furniture, electronics, etc., when we’re surrounded by them everyday. But when they’re suddenly gone due to fire, flood, burglary, or vandalism we face a huge loss. Adding extra protection for your property doesn’t make you paranoid, it makes you smart.
- Personal liability coverage Renter’s insurance does more than just protect the possessions in your home. It also protects you from events that take place within your home for which you could be held legally responsible. For example, if someone falls in your home or your dog bites a visitor, the resulting lawsuits and medical bills could cost you thousands of dollars and put you in debt for years.
- Displacement coverage If something happens to your place that deems it inhabitable, renters insurance will pay for your temporary hotel expenses while the repairs are being done.
- Covers gaps in your other insurance policies Renter’s insurance will go as far as cover possessions stolen from your vehicle or your suitcase while on vacation. You’ll have peace of mind beyond your front door.
- Power surge damage When electronic equipment is destroyed by faulty wiring, renters insurance will replace your fried items.
- Coverage for damage you caused We all make mistakes which can cause unintentional damage to our rented space. Whether you left the water faucet on or your unsecured bookcase comes crashing to the ground, your renters insurance can help cover the cost of repair or restoration.
- Coverage for frozen pipes In the cold winter months, systems like your water pipes, air conditioning, or sprinklers can freeze and burst. The resulting water damage to your property will be covered under your renters insurance if specified.
- Coverage for sewage drainage damage Gross. Hopefully this never happens to you. Unfortunately, clogged items in your drainage system can cause overflow which leads to damaged property. For an additional cost, this will be one less thing you’ll have to worry about.
When shopping for renter’s insurance, you should first shop with your current auto insurance provider (if you own a car). Many auto insurance providers give their customers a large discount on their monthly payments when they bundle their auto and renters insurance together. Although your current insurance provider may offer you what you think is a fair price, for a bundled policy, you should still shop around for other premiums if you’re concerned about finding the cheapest one. Use an online site like Insurify that allows your to customize, build, compare, and purchase a policy in minutes with the help of professional agents throughout the quote process. You’ll be confident you’re getting the most coverage for the best price.