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OWN VS RENT? Don't forget to insure!

Posted by Scott Stueber, CPCU, CISR, AAI on Aug 16, 2016 9:00:00 AM


When deciding whether to buy or rent, there are many factors to consider, including, but not limited to, job stability, relocation, and relationships. When it comes to financing, costs associated with owning a home include the mortgage payment, property taxes, insurance, utilities, and maintenance – which, as many people know, can be never ending!

With all of those expensive variables, it’s understandable that saving for a down payment isn’t a priority. So many people choose to rent.

One important cost that applies to both owners and renters is insurance. Yes, that’s right! Most landlords require this as part of the lease agreement. Even if it’s not in the lease, it’s in your best interest to carry insurance for your personal property, as well as for liability.

Personal Property Coverage

You may think you don’t have much to insure, however if you take inventory of everything you own, it adds up quickly. If you had to replace all of your personal property, including clothes, shoes, furniture, electronics, small appliances, sporting equipment, etc., it could certainly cause a significant financial setback. With a renter’s policy, minimum property coverage starts around $30,000 and, if you needed them, you could get higher limits.

Liability Coverage

Most people understand property coverages, however, personal liability, which is a much greater exposure, is often overlooked. Personal liability comes into play if your actions are responsible for someone else’s injury. Here are some examples: You leave a box on your apartment steps and someone trips on it. You’re responsible for snow removal and a passer-by slips on the icy sidewalk. You accidentally hit a child while flying your drone. A friend runs into a post while trying out your new hover-board. If an accident like this occurs and you’re responsible, you’d have to pay for medical treatments, tests, surgeries, prescriptions, plus their time off of work … all out of your own pocket. It’s frightening! A standard renter’s policy includes personal liability coverage which could help protect you if you’re found negligent and responsible for someone else’s injuries. Minimum liability limits start at $100,000 and can be purchased up to $1 million.

Additional Living Expense

Finally, what if a fire destroyed your apartment building and you had nowhere to live? The renter’s policy also provides coverage for additional living expenses. This covers any necessary increases in living expenses while you’re displaced because of a covered loss. You may have to stay in a hotel, eat out, board a pet, or incur increased mileage to get to work. These costs would be covered until you’re able to move back into your apartment.

A basic renter’s policy is fairly affordable. For as little as $180 a year, you’d have broad protection and peace of mind while you save for that American dream of owning a home!

Do you have any tips or information you’d like to share? I’d love to hear from you. Please share them in the box below.

This article is intended for general educational and illustrative purposes only and should not be construed to communicate legal or professional advice. Further, this article is not an offer to sell insurance. Please consult with your licensed insurance agent for specific coverage details and your insurance eligibility. All policies are subject to the terms, conditions, limitations, definitions, and exclusions contained therein.

Topics: Home Insurance, Renter's Insurance

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