Seven myths about renter's insurance you probably believe
Financial advisors often call renter insurance one of the biggest financial bargains you can find. Besides protecting your belongings against risks like fire and theft, renter insurance covers loss of use and additional living expenses (if your home is damaged in a coverd loss), 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 dwellers as homeowners).
So if it's such a great deal, why do more than half of renters nationwide go without? These common myths might explain why:
It's expensive. 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.
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. That's true, BUT your landlord's insurance won't replace
your belongings if they're stolen or destroyed in a fire. The landlord's insurance protects only his or her investment in the building.
My auto policy covers property stolen from my car. Nope. 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. Look again. Renters tend to underestimate the value of their belongings. The average renter has more than $30,000 in personal property. If you've never taken an inventory of your belongings (and many of us haven't), read our
tips on creating a video inventory.
I'll never get sued. Almost no one who gets sued ever expected it. Renter insurance not only covers liability incidents inside your home, but also away. Say, for example, you organize a white-water rafting trip for some friends, strictly for fun, where someone is seriously injured. If the injured person later sues you (contending that, as the trip organizer, you should have known about the danger), your renter insurance would pay your legal costs and any settlement, up to your policy limits.
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.
In less than five minutes, you can get a renter's insurance quote and buy a policy
online or call your local PEMCO agent or 800-GO-PEMCO. You'll even get a discount on your policy if you also insure your car with PEMCO.