Can You Afford to Be Without Renter's Insurance?

Renter's insurance is similar to a homeowner's policy, except you don't cover any damages to the building outside of your unit. The landlord has the building insured for any damages or loss, but you are on your own as far as the things inside that belong to you. Getting rental insurance can help protect you. If the rental home burned down, the owner would get an insurance settlement. As the renter, you would be homeless and without any possessions.

The Cost of Rental Insurance

It is hard to pinpoint an average cost of rental insurance, because several things are factored in. The cost depends on the age and condition of the house you are renting, and the location. If you live in a high crime area, the cost may be higher because you are more likely to have a break-in. The same may be true of flood and earthquake areas.

A report from the Independent Insurance Agents and Brokers of America states that an average cost for renters insurance is about $240 a year. Remember, though, that this is an average and your renter's insurance costs may be higher or lower, depending on what state and area of the city you live in.

Most of the people I know who rent homes or apartments do not have rental insurance. They either say they cannot afford it, or that they do not need it. Can you afford to replace everything in your rental home out of your own pocket? Most people do not even realize how much money they have invested into their personal property.

Take an Inventory to See How Much Rental Insurance You Need

Grab a pen and paper and walk through your home. Jot down everything you see and put an estimated price on what it would cost to replace it on your paper. Do not overlook minor things. Towels, for example cost on average of $5.00 each. How many towels do you have that would need replaced? Estimate sheets, blankets and a few outfits of clothing too. You will need all of these things, not just major appliances and furnishings.

You may find that you have a staggering amount on your list and that there is no way you could replace it all to start all over in another home. The average cost of rental insurance is about $240. According to the HABA that premium is for $30,000 worth of property. It just makes sense to have rental insurance to protect what you have.

I pay my homeowners insurance on a monthly basis. It costs me about $50 a month, and that covers my house and all of the contents. I could not afford to replace the items in my house if I did not have the insurance. Renters insurance will give you the same peace of mind. The average cost of renters insurance is a small amount compared to what an out of pocket replacement cost would be.

Source:

Money Smart Life.com

Average Cost of Renters Insurance