You’ve just graduated from college, you move to a new city for a new job, you are nowhere near settling down, or maybe the housing market just plain scares you – there is any number of reasons to rent instead of buying a home.
You are in good company. In fact, in the nation’s five largest cities, renters outnumber homeowners. According to the Insurance Information Institute (III), 69% of New York City residents rent their homes followed by 61% in Los Angeles, 55.1% in Chicago, and 54.6% in Houston.
You may not have to pay for repairs to your home in the event of a fire or another accident, but your landlord is not responsible for damage to your possessions. That’s where renters insurance comes in. Anything can happen, and most people can’t afford to replace all their clothes, furniture, electronics and other household items if they are destroyed.
Even the most thrifty renter who may be living paycheck-to-paycheck can make room in their budget for renters insurance, which can cost as little as $16 a month, says the National Association of Insurance Commissioners.
A May 2012 Insurance Information Institute survey indicates that only 31% of renters have renters insurance. I.I.I. states that, “renters insurance protects against losses from fire or smoke, lightning, vandalism, theft, explosion, windstorm and water damage (not including floods). It also covers your responsibility to other people injured at your home or elsewhere by you, a family member or your pet and pays legal defense costs if you are taken to court.” You can also be covered for additional living expenses like hotel bills, rentals, or restaurant meals if your home is uninhabitable.
If you live in an area especially prone to flooding or hurricanes, renters should look into flood insurance as well. And renters who keep luxury items like jewelry, collectables or high end electronics, should consider adding a floater to your renters insurance policy to cover the full value of high-dollar items.
Check out the Insurance Information Institute’s renters insurance checklist to assess your own coverage.
Follow Elise Rambaud Marrion on Twitter @emarrion_cmn.