You don’t need to be an expert in real estate to feel the pressure coming from the ever-growing price of apartments in the United States. After plateauing for half the decade, house prices skyrocketed in 2021 to reach a mind-blowing average of $408,000, forcing millions of potential real estate buyers to shift their priorities in favor of renting their homes rather than buying them.
And not for nothing is the real estate rental market growing. Without the average rent for a two-bedroom apartment floating around $1,100, not only is renting a home much cheaper than buying one, but it also allows for flexibility and freedom, the two key aspects of the life of modern millennials and zoomers.
Almost half of the U.S. renters are under 30. They love traveling and working remotely and they hate being over-burdened by routine. They take care of their mental health by changing places and sights, and they have developed a new lifestyle that leverages the opportunities brought by the golden age of travel. Even despite the notorious pandemics.
Why Is Renters Insurance a Great Option For Renters?
While owning a home is part of the American Dream in the minds of millions, renting spares you from hefty repair bills, down payments, homeowner’s association fees, property tax, and many problems homeowners have to deal with.
What’s more, renting a house is much more viable financially. By purchasing insurance for renters you can safeguard against the majority of on-property troubles, guaranteeing yourself months of troublesome living until you are ready for the next step in your quest of life. Besides, proof of renters insurance – here you can find more information about it – may be required by the landlord before you can move in.
On top of that,
- Renters insurance is up to 10 times cheaper than homeowners insurance.
Let’s take a moment so that it can sink in.
What Does Renters Insurance Encompass?
One of the major benefits of renting a house is that you are not responsible for the insurance of the building. Should anything happen with the physical structure of the apartment or the possessions of the landlord, the latter – not you – will have to deal with the consequences.
On the other hand, you’re not completely off the hook in the sense that
- you still have to take care of your personal belongings;
- you may be liable for injuries incurred by third parties on the rented property.
Both ‘a’ and ‘b’, however, can be covered by a standard renters insurance policy, which – upon the desire of the insured – can be extended to cover extras such as, for example, identity theft and jewelry.
Renters Insurance In A Nutshell
| Type of Coverage | What It Covers |
| Personal Belongings | Losses from theft, fire, vandalism, electronic malfunctions, and other perils specified in the policy. The two common exclusions – floods and earthquakes – can be covered under a separate policy. |
| LiabilityOn-property damage and injuries incurred by third parties when the renter is at fault. | |
| Additional Living Expenses | Extra costs that may arise as a result of one of the named perils rendering the rented house temporarily uninhabitable. |
What Is Excluded From Renters Insurance Coverage?
None of the basic renters insurance policies cover floods, earthquakes, and valuable belongings, such as fine, musical instruments, fur coats, various collectibles, and miscellaneous costly stuff alike. However, all the mentioned can be covered under a tailor-made floater policy or an extended version of your renters policy.
Renters Insurance Deductible
Just like most types of insurance, renters insurance is largely determined by its deductible, which is the amount – either a fixed amount or percentage – you pay out of pocket before your insurer covers the rest.
The average deductible for insurance for renters ranges between $500 and $1,000 and is specified on the declarations page of your policy. As a rule, the higher the deductible, the lower the premium, and vice versa.
How Do You Get Your Renters Insurance?
Here’s what you should do to hit the bull’s eye with your renters insurance:
1. Estimate your insurance needs.
To not underinsure or overinsure, create a list of your belongings – for example, a spreadsheet – and evaluate the price of each item in the list. Chances are you will realize that you did underestimate the total value of your possessions.
2. Choose the policy that covers your needs.
Actual cash policies reimburse the property’s worth at the time of damage, whereas more expensive replacement policies reimburse the full cost of replacement. Also, there may be other factors to proceed from. For example, if your house is located in a flood-prone zone, it might be wise to include flood coverage in your policy.
3. Submit your application.
In the COVID-affected world, all companies will allow you to apply online even without meeting a company’s representative.
4. Choose your deductible and submit the payment.
You can vary your deductible based on how much are you willing to pay out of pocket should the unexpected happen and how high a premium you’re willing to pay.
Voila, you’ve just become one step closer to the freedom we all crave.
With that, it’s time to wrap it up. Be smart with your choices. Take care.
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Written by Allison Langstone
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