Did you know that many financial advisers call renter coverage the biggest bargain in insurance?
Besides protecting your belongings against fire and theft, renter insurance covers you for personal liability lawsuits and legal defense fees (think dog bites or slip-and-fall injuries) and car prowls (twice as likely to happen to apartment residents as homeowners).
Unfortunately, fewer than half of renters take advantage of this affordable worry-buster, probably because of these common myths:
- It costs a lot. The No. 1 reason people say they don't get renter insurance is that it's too expensive. The truth is renter policies commonly cost around $200 per year – about 55 cents a day.
- It doesn't cover much. Actually, renter insurance protects against damage from many risks. The most common are fire, theft, vandalism, smoke, electrical surges and windstorms.
- My landlord already has insurance. Your landlord's insurance protects only his or her investment in the building. It offers no coverage for your belongings if they're stolen or destroyed in a fire.
- My auto policy covers property stolen from my car. Auto insurance only covers items attached to the vehicle. So without renter insurance, anything (from laptops to holiday packages) left in your car is unprotected.
- My belongings aren't worth much. Renters tend to underestimate the value of their belongings. The average renter has more than $30,000 in personal property.
- The person on the other side of the wall is insured. Odds are that's not the case. If your neighbors have a fire or overflowing toilet that damages your belongings and they don't have the money to compensate you, you'd get stuck paying to replace those items.
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