What is the Right Amount to Spend on Renters Insurance?
If you rent your home, it is of paramount importance to protect the things you own. Although landlords absorb and assume much of the liability associated with rental living, the fact remains that you are responsible for the things you keep in that space. If they should fall prey to theft, fire or other damage, you aren’t likely to get a check from the landlord. That’s why renters insurance is an essential part of rental living. You need to cover all the bases in case tragedy strikes. What many people find themselves wondering about is how much to spend on a policy of this kind.
The simple answer is: as much as necessary. Renters insurance tends to be far less expensive than homeowners insurance, so it is ideally suited to people who may lack the financial resources to cover a down payment and mortgage. That said, not all policies are created equal some only cover a certain capped amount, while others allow you to itemize a few major possessions in the bunch. Needless to say, if the loss of any specific item will prove financially debilitating, you owe it to yourself to cover everything possible with the most comprehensive policy you can find.
Renters insurance is generally considered affordable. Many renters find they can cover up to $50,000 in possessions for under $350/year. When you compare values such as these to the heartache that could accompany theft, it does indeed seem like a small price to pay. That doesn’t mean you shouldn’t do your homework, however – better rates may be hiding in low-volume insurance companies and other special deals. Speak with your landlord and neighbors about the rates they have found, as you might be able to lock down a surprising bargain with just a bit of research.
If you find the rates too high even after you have looked around, you may want to consider folding that policy into the same company as another existing insurance contract. It’s not unusual for renters to combine renters insurance with auto insurance. This is an easy way to lower both rates and enjoy true umbrella coverage. Conversely if you can afford more, you may want to go the extra mile and invest in catastrophic property insurance, which typically covers “acts of God” such as flood, hurricane and earthquake. Be sure to read the fine print of any policy you sign, as hidden fees and loopholes may be lurking in the fine print.
There is simply no substitute for peace of mind when it comes to the things we own. If you have been putting off this essential purchase, now is the time to get some free quotes and begin pulling together a list of your possessions. Estimate replacement values conservatively and be sure to negotiate the price wherever you end up. Often by getting the ball rolling with competitive quotes, you can haggle your way down to a few outstanding options.