Why You Need Renter’s Insurance and What It Covers

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We’ve probably all heard a story from someone who has had their house robbed. Maybe it happened to a close friend, or a friend of a friend. Maybe they were on the news and you just caught the tail end of the interview as you were flipping channels trying to find the football game. All of these people have a few things in common: they’re not you, they don’t directly impact you, and the likelihood of their story becoming yours feels slim to none.

So you decide not to get renter’s insurance to save a little bit of money. You keep living day-to-day, following through your daily routine until one day, you return home from work to a smoking shell where your home once stood. Everything is gone, and you didn’t do anything to protect yourself.

The thing is, nobody expects disaster to strike them, it just happens. It happens in the most unlikely of times and when you least expect it, leaving you wondering why you didn’t just listen to your best friend when they were crying on your shoulder.

What Are The Benefits Of Renter’s Insurance?

Many renters have the belief that their landlord’s insurance will have coverage for their belongings in the case that they are affected by a disaster. Unfortunately, most landlords only have enough insurance coverage to ensure that the thing they actually own (i.e. the structure around you) is protected. This probably makes a lot of sense, considering they don’t actually own the contents of their building and shouldn’t have to pay for that coverage. This leaves literally everything else that belongs to you in a risky position. All your electronics, furniture, clothing, and anything else that doesn’t hold the roof over your head are fair game for a hefty replacement bill. Those things need a separate policy for fire, theft or damage, and these all fall under a renter’s insurance policy.

Of course, while the building itself is not your responsibility to insure, you also need to be prepared in case you make mistakes that cause damage. Suppose you accidentally leave a sink running and it overflows into your neighbour’s apartment, causing extensive water damage. Now you’re not only going to have to pay for those damages, but you may also have medical bills to pay if someone slipped and fell requiring treatment, which might include legal fees should you be sued for the trouble. These sorts of costs are covered by most renter’s insurance.

What Does This Insurance Cover?

Okay, so you’ve made the smart decision to get yourself a renter’s insurance policy, and you want to protect yourself against the possibility that you lose everything. The important thing you need to know is that there isn’t a one-size-fits-all policy that applies to everyone. Indeed, you wouldn’t want to be paying for coverage from mudslides if you live in the middle of the flattest parts of Saskatchewan. Standard renter’s insurance will usually only cover common types of disasters that are usually applicable anywhere, including power surges, water damage, fire, vandalism, or theft.

Certain types of disasters like floods, tsunamis, earthquakes, mudslides, nuclear hazards, or hurricanes tend to be much more region-specific, and are considered additional options, which can be added to your insurance package. If you are generally concerned about any of these being a higher risk for your area, it would generally be a good idea to add it to your list.

While these policies are meant to cover your belongings, it should be noted that there are often limits on how much a policy will cover. This usually means only a couple thousand dollars for electronics, and potentially even less for items like jewellery or furs. This means that if you want to cover your expensive engagement ring, custom-built gaming PC, or any item that is more expensive than usual, you may want to consider add-ons for each of these items. These costs are usually very low, amounting to only a few dollars every month, but is well worth the price to protect much more valuable items.

Built into your policy should be an option called “loss of use,” meaning it will cover your living expenses in the case where you can no longer live in your home because it was damaged and needs repairs. This part of your policy will cover hotel bills, food, and any other sorts of expenses incurred should this happen.

Liability coverage is the type you need if someone else becomes injured or their property is damaged in the case of your negligence. This does not cover you should you do this intentionally, which seems obvious, but apparently gets claimed all the time. A vehicle-related injury is also not part of the policy, as that falls under the umbrella of auto insurance.

There are other types of coverage that you could apply for on your own. Visitors getting injured in your home, limited protections against fraud attempts, and options to cover the property of others that happens to be damaged while under your roof. These, among others, are circumstantial, and can be applied if you deem it necessary.

What Does It Cost?

This might seem like we’re piling on a whole lot of stuff here, but the reality is that the cost of these plans isn’t really all that high. If you’re looking at even a basic plan, it will usually include something similar to $30,000 for personal property, $100,000 of liability coverage, and a $500 or $1,000 deductible. This can be had for as little as $10 to $15 per month, and many of these extra added protections will only run you a few extra dollars.

Obviously, this sort of renter’s insurance is built for a worst-case scenario, and rushing to tally up all of your belongings tends to be unnecessary and a bit of a time commitment, as your apartment’s contents will generally change over time, rather than staying stagnant. A good rule of thumb is to take pictures or videos of your apartment on a regular basis, perhaps every one or two months, to ensure that you have an updated record of a large amount of what might own at any given time. Keeping those images on your phone is generally a good idea, as you tend to have it with you most of the time and won’t be damaged. Keeping them in cloud storage is another good idea to allow you to access it from anywhere, even if your hard drives were destroyed.

I think you might agree that for the price of one meal a month, it would definitely be worth the price should disaster ever decide to come knocking on your door.