Renters insurance doesn’t get talked about much, even though it can come in handy when you least expect it. Say a neighbor’s pipe bursts and your apartment gets flooded. Renters insurance reimburses you for the stuff that got damaged. In the event of fire, natural disaster or break-in, that policy helps you replace your things. Basically, renters insurance protects you when some catastrophic turn of events damages or destroys your belongings.
Still, nearly 60% of renters don’t have a policy. Why? Well, just as with its life or disability insurance counterparts, people have a lot of misconceptions about how renters insurance actually works. Here are six renters insurance myths, debunked.
Myth #1: My stuff isn’t worth insuring.
We get it: Some renters treat an apartment like an apartment and not necessarily a home. That means cheap, minimal furnishings that seem unworthy of insurance. But, even if you’re exclusively wall-to-wall IKEA, so what? Your things are your things, and it likely costs more to replace them than you can afford to out of pocket. Even just one expensive item, like a flat-screen TV, laptop or set of gym equipment is worth insuring, given how much money things cost these days.
Myth #2: Renters insurance is expensive.
Sure, premiums for other types of insurance are sometimes costly, but renters insurance isn’t comparable in cost to, say, homeowners insurance. In fact, in most states, a renters insurance policy costs less than $20 a month. Plus, if you bundle your policy with your car insurance, you could get a discount.
Myth #3: Renters insurance barely covers anything.
When you clarify the myth that renters insurance isn’t pricey, it creates another myth that it won’t provide good coverage since it’s so cheap. In reality, a good renters insurance policy will cover a variety of items and/or incidents. This coverage can include:
Personal property: That’ll cover replacing or repairing big-ticket items, like your furniture, and also things like clothing, electronics or appliances. Your policy may cover the actual cash value of your property, or the replacement cost value, whichever you choose. Bonus: Your policy can cover the cost of other people’s property. So if that friend’s laptop you borrowed gets damaged at your apartment, your renters insurance could pay for its replacement or repair.
Liability and medical costs: If a guest or some third-party slips and falls in your apartment or Fido decides to take a big bite out of their leg (ouch!), you could find yourself liable for any medical costs they incur for their injuries as the incident occurred on your premises. Liability coverage pays for at least a portion of their expenses (up to your policy limits).
Temporary/additional living expenses: If your place becomes uninhabitable (or, in an extreme case, nonexistent), your renters insurance reimburses you for motel or hotel expenses until you find a new place to live.
That’s not to say renters insurance covers every little thing that goes wrong in your apartment. Exclusions will apply. For instance, renters insurance policies don’t cover floods or earthquakes. And some pet damage won’t get reimbursed.
Myth #4: My landlord’s got me covered.
Actually, they don’t. A property manager’s insurance plan isn’t the same as renters insurance. Their property insurance protects the actual building, not the contents within. In fact, your landlord isn’t legally allowed to insure your belongings.
So, if that volcano you rented a condo next to erupts and envelops the building in molten lava, your landlord gets reimbursed for damages to their building under their policy, but you’ll need your own coverage for your stuff. (And, in case you’re wondering: Volcanic eruptions are indeed covered under renters insurance as one of 16 major perilous events.)
Myth #5: My roommate’s got me covered.
You could have five roommates, all with renters insurance policies, and your belongings will be left unprotected if you go without insurance. Just like your landlord’s property insurance, a roommate’s renters insurance policy covers their property, not yours. Even if you’re splitting rent and other living expenses with your roomies, don’t expect their insurance to cover you (or vice versa). Granted, you could split coverage and share the cost of deductibles, but you’ll need to arrange that with your roommate(s) before making a claim, not after.
Myth #6: Nothing will ever happen to my stuff, so I’ll never need to use my policy.
Part of the reason people skip insurance in general is because they think nothing bad will ever happen to them: for instance, "I’ll go without health insurance because I hardly ever get sick" or "I’m single, so I don’t need life insurance."
This thinking carries over to renters insurance, too, since you might think you’ll never get hit with a major storm, emergency event or burglary. But all of those things happen — and more often than you think. For instance, according to FBI statistics, there were an estimated 327,374 robberies nationwide in 2015, resulting in over $390 million in losses.
Bottom line: You shouldn’t let confusion about renters insurance preclude you from getting proper coverage. And, if you’re still unclear how coverage works, no worries. We’ve got an FAQ designed to help you find the right policy right here.