Imagine all your possessions lost in a fire or robbery. Are you financially protected? A new study found that most Americans don’t have renter’s insurance despite coverage that could prove invaluable.
Just 34% of Americans who rent their homes have renter’s insurance, according to a survey of more than 1,000 participants by InsuranceQuotes.com. They found that the most common excuse for not having renter’s insurance was that respondents felt safe without it. More than half replied: “My apartment or rental home has good security.” Forty-eight percent erroneously believed they were covered simply because their landlord has insurance and, finally, more than half thought that the cost of renter’s insurance is too expensive.
The pricing problem is sort of a myth. InsuranceQuotes found that 60% of Americans incorrectly guessed the annual cost of renter’s insurance at $250 per year or more. Another 21% thought it cost a as much as $1,000 per year. It’s actually less. According to the National Association of Insurance Commissioners, the average annual cost of renter’s insurance is $185 per year – or $15 a month.
I spoke with Laura Adams, senior insurance analyst at InsuranceQuotes.com for more on the importance of renter’s insurance and shares how to score the best rate.
“The most immediate is your personal belongings in case they’re broken damaged in a natural disaster or stolen,” she says. Then there’s the coverage we usually don’t consider, like liability insurance. “Lets say you have a party and someone gets bitten by your dog or slips and falls and has medical injuries,” says Adams. “Having liability coverage would protect you from potential finaicial loss. There’s another big, often overlooked piece: additional living expenses. If you have a fire in your building and it becomes uninhabitable. As a renter, you have to find quick temporary hosuing or stay in a hotel. The additional living expenses will pay for your temporary housing and other expenses like meals, etc.”
How Much Will It Cost Me?
Again, despite what many assume, the average cost of renter’s insurance is under $200 a year. Adams says there are three factors that could alter the rate: 1) The type of coverage you choose 2) how much you’re covered and 3) the deductible you choose (the higher the deductible the lower the premium). All of these variables can impact on your monthly rate. When is comes to how mich coverage you need, Adams says $100,000 is the standard coverage for most policies. Note: Some high-value items in your home such as a diamond ring may require separate insurance.
The amount of coverage you’ll need will, of course, be largely based on the value of your possessions. Adams recommends taking stock of your possessions at least once a year. To make the job easier, she suggests working on big categories instead of approaching item by item. “Lump them into categories like jewelry, furniture and art, housewares like dishes and glasses, silver and gold and electronics. Thinking about it in chunks will make it easier,” she says.
Score the Best Rate
“Whether online or in person, you want to get three quotes for an apples-to-apples comparison of coverage,” she says. Another tip of her’s is to try to bundle your renter’s insurance with another policy for a discount. “If you have a car insured by a certain company, ask an agent if there’s a discount for adding additonal coverage,” she says. “Often there are discounts available but you won’t kow unless you ask.”