Renters Insurance – You NEED It and You Can Afford It

Insurance is important, there is no doubt about it.  Car insurance, health insurance, life insurance and disability insurance are all part of a good financial plan.  One insurance that is often overlooked is renter’s insurance.  If you are living in military quarters or renting off-base, you really need to have renter’s insurance to cover the cost of your things and also any liability that might arise from your occupancy.  It is very affordable, easy to obtain, and will make your life easier and more peaceful.

So, what does renter’s insurance cover?

Renter’s insurance pays for all kinds of damage, theft and other loss.  First, it covers your personal property.  You might be thinking that you don’t own a lot of things.  You would be amazed at how quickly your books, CDs, uniforms and kitchen things can add up to thousands of dollars.  If you have a fully furnished house, you are easily looking into tens of thousands.  Renter’s insurance covers your property from theft and damage from fire, smoke, wind and internal plumbing problems (but not external floods.)  In addition, renter’s insurance provides coverage for your belongings even when they’re not in your house.  Every policy is a little different, but usually your things are covered up to a percentage of the total value of your coverage.

In addition to personal property coverage, renter’s insurance offers liability coverage.  What does that mean?  Well, if you accidentally have a little kitchen fire, renter’s insurance will help pay for you to fix the kitchen (which your lease probably holds you responsible for.)  If someone trips leaving your house and needs medical attention, renter’s insurance will provide you protection from expenses that result.

There are many questions to consider when purchasing renter’s insurance:

  1. How much coverage do I need?  Insurance carriers usually have worksheets or online calculators to help you figure out how much insurance would be right for you.
  2. Is it replacement coverage, or actual cash value (the price you paid, minus age and wear)?
  3. Do I need flood, earthquake, or other natural disaster coverage?
  4. What items are not covered or have coverage limits?  Do you need a separate policy for your computer, jewelry, or other special items?
  5. How much coverage do you have outside of your home address?  Will your iPod be covered if you are deployed?  Is your CD collection covered if it is stolen from your car?
  6. How much coverage do you have if you damage your dwelling?  An overflowing sink or a fire can cause damage not only to your unit, but also to adjacent units.  You’d be amazed at how fast the costs can add up.
  7. Will this policy pay for your extra housing expenses if you do have damage to your unit?
  8. Does this policy cover everyone in the unit, or just the person who is named in the policy?
  9. What kind of discounts are available?  Many companies offer discounts for particular safety features in the home, for military service, or discounts for customers who have multiple policies (such as your auto policy.)
  10. What are the payment policies?  Do you pay for the entire year at once, or is there a payment plan available?  What fees are involved in a payment plan?
  11. What is the policy’s deductible?  A deductible is the amount of loss that you are responsible for before the insurance will start to pay.

Renter’s insurance usually costs between $10 and $20 dollars per month.  It is easy to think that you don’t need renter’s insurance, or that it is too expensive.  However, it is valuable coverage that will protect you against many different kinds of loss.

This is a republishing of a popular post from the past.  My family is away from home this holiday weekend, and I am unsure how much internet access I will have.

About the Author

Kate Horrell
Kate Horrell is a military financial coach, mom of four teens, and Navy spouse. She has a background in taxes and mortgage banking, and a trove of experience helping other military families with their money. Follow her on twitter @realKateHorrell.