I live and work in a college town, so I work with a number of people who rent their homes to college students. Many of the students and young adults are renting their first place and have modest furnishings. Oftentimes, they don’t feel renters insurance will be of value to them because they don’t have very many personal belongings and are just getting started. They are concerned that the premium will be expensive, especially when they hear that many landlords recommend or may even require $100,000 to $300,000 in liability protection. However, even if think you don’t own much in terms of possessions, there are other valuable ways renters insurance can protect your assets, savings, and future earnings.
Loss of Use Coverage
One significant way renters insurance helps protect your savings and can save you from financial difficulty is by making sure your additional living expenses are paid for after a covered loss, such as a fire or water damage. If you had to stay in a hotel and eat out for an extended time, possibly even months, while your place is repaired or rebuilt, additional costs could add up beyond your normal monthly expenses very quickly. This includes expenses that you didn’t require when you had access to your home, such as laundry facilities, a storage unit, pet boarding, and more. Loss of use, often referred to as additional living expense, covers those additional expenses so they don’t come out of your pocket.
Personal Liability
One of the most important ways renters insurance protects your assets, both current and future, is by providing personal liability coverage. If you cause damage to the place you are renting, or worse yet, cause a fire, your personal liability coverage could save you from a much greater financial responsibility than replacing your clothes and dishes. Personal liability protects you financially in the event you are sued for property damage or bodily injury. Personal liability coverage is flexible because it follows you wherever you go and protects your family too.
Anyone can accidently cause injury or damage, including children and dogs. For example, a mother was at the park with her son who was still getting used to his new bike. He was getting pretty good at riding his bike until he had to stop. Instead of hitting the brakes, he pedaled right into a parked luxury vehicle! This was considered property damage and it was covered under her personal liability.
Personal liability can cover the actions of your dog. Dog bites account for about one-third of liability claims. Most often these claims involve a dog bite, but even friendly dogs can cause injuries. I am familiar with a claim involving a big clumsy lab (we’ll leave his name out). An elderly neighbor woman was walking by and thought the dog would greet her by jumping up for a kiss but instead wound up knocking her over and sadly broke her hip in two places. The neighbor recovered and still thought that unnamed dog was adorable, but she had thousands of dollars in medical bills. The dog’s owner had personal liability and this was covered as a bodily injury claim.
Renters insurance is reasonably priced for the coverage you receive. Most policies are around $15 to $20 month, depending on how much coverage you need. If you purchase your auto and renters insurance from the same insurance company, you can save on both policies as most companies offer generous discounts for bundling policies.
Renters insurance is flexible and can be modified to grow with you. If you move to a different location, you can keep your renters insurance – you simply need to inform your insurance agent and update your address on the policy. If you make new purchases you can increase your personal property coverage at any time. Renters insurance offers replacement cost coverage, which is the present cost to replace your personal items. The cost to add replacement cost is minimal and it is significantly better than the actual cash value or depreciated value of your property at the time of your loss.
Even for those just getting started, you can enjoy peace of mind and several different benefits from renters insurance. These are just a few of the most essential ways renters can protect their financial future and way of life. There are additional options that can be purchased to further enhance your coverage.