Do you need tenant insurance? Yes – here’s why

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    Could you afford to replace your entire closet if your apartment catches fire? What about your phone, laptop, and all of your furniture? If the answer is no, you probably need to Pension insurance.

    “Tenant insurance can’t prevent terrible things from happening, but it can make life a little easier if and when they happen,” said Yael Wissner-Levy, vice president of communications at insurance company Lemonade, via email.

    And coverage can cost less than you expect – in fact, some tenants might pay next to nothing. Find out why you want tenant insurance and how affordable it can be.

    1. Your landlord’s insurance does not cover you

    Some landlords require tenant insurance from their tenants, but if you don’t, it is not because you are insured. “Lots of tenants [believe] Since the landlord is insured, he covers damage to his property. This is not the case, ”said Wissner-Levy.

    The landlord’s insurance covers the structure of the building, but not the tenants’ personal belongings. If your TV is stolen or your dishes are lost in a kitchen fire, your landlord’s insurance won’t pay to replace them – but renters insurance likely will.

    A landlord’s guidelines are also unlikely to help if you accidentally damage a neighboring home. “If you [let] Your bathtub or sink will flood the apartment below you, the landlord won’t cover it, ”said Jeff Schneider, president of Gotham Brokerage Co. in New York City. “You can be sued for … damaging the apartment below you.”

    Standard renter insurance includes $ 100,000 liability insurance that can pay damages and legal costs if you are sued for accidental injury or damage to your property.

    2. You probably own more than you think

    “[One] The reason people avoid tenant insurance is because of the thought, “I don’t have anything valuable that is worth protecting,” said Wissner-Levy. But you might be surprised.

    Brandon Okita, vice president of FIA Insurance Services in Torrance, Calif., Recommends opening every drawer and cabinet in your home to take stock of your belongings. Once you start working out the value of each item – electronics, jackets, shoes, etc. – you will likely find that it would cost a lot more than you expected to replace everything.

    3. Tenant insurance can pay for accommodation after a disaster

    “Most policies offer a benefit in terms of loss of use or additional cost of living,” says Schneider. “It pays off when major damage – usually fire or water damage – drives you out of your home and has to spend the night in a hotel.”

    Loss of usage coverage can also be paid for restaurant meals or other out-of-home expenses during the repair.

    4. It can protect your finances

    Perhaps you’re saving up a down payment on a home, or you’ve worked hard to get out of debt and build an emergency fund. The last thing you need is a lawsuit that will wipe out everything you have.

    “Let’s say you go to play golf … [and] You hit someone in the head and they turn around and sue you, ”says Okita. If a court finds you responsible, it is yours Tenant liability insurance Usually covers the costs up to the limit you have purchased, even if the incident does not take place at home.

    This coverage can also come in handy when your dog bites someone in the park, your child breaks a precious heirloom in a friend’s house, or a guest slips and falls into your apartment.

    5. It covers items that are not at home

    Many tenant policies offer some coverage for your belongings even when they are away from home. “If your laptop was stolen in the neighborhood café or your phone was stolen on the subway, your policy could cover you,” said Wissner-Levy. (Remember, filing a lawsuit would only make sense if the lost item was worth more than yours Deductible.)

    You can also cover items in a storage unit, Okita says.

    6. The cost may be less than expected

    A common reason to avoid renting insurance is the cost. “A lot of people these days aren’t looking for additional costs,” says Schneider.

    The average cost of tenant insurance According to NerdWallet’s rate analysis, it’s $ 168 a year, or roughly $ 14 a month. However, if you have a car, thanks to the multiple discounts offered by many airlines, you can pay less by bundling your rental insurance with your car insurance.

    For example, Okita notes that a 5% bundle discount on an auto policy of $ 3,000 would be $ 150, which is almost the average premium for the renter policy.

    You may also receive discounts if your apartment has smoke detectors, alarm systems or other security measures.

    In the worst case scenario, you will likely be glad you paid for coverage. “Tenant insurance is the best defense against things in life over which you have no control,” said Wissner-Levy. “Once covered, most people see the benefits.”

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