Is renters insurance worth it?

With so many things to pay for in life, you can soon find yourself wanting to save every single bit of spare change you have to actually enjoy what this life has to offer. After all, you have rent to pay, bills to shell out for, and food to buy, so why can’t you buy yourself a pizza or go to the movies every so often? Because of this, many people who rent their houses from landlords often try to save money wherever they can and scrimp on buying renters insurance. But is this the right move? Is renters insurance really worth it? Here are a few questions you need to ask yourself before making that decision…

How valuable are your possessions?

If you’ve ever had an airline lose your suitcase while on vacation, you’ll know how darn annoying it is to have fewer clothes and cosmetics during your trip. However, we also know that it’s not the end of the world because you can replace the few shorts and dresses you took along with you. Yet, what if all of your belongings were destroyed in a devastating fire? Of course, we all wish that this could never happen to us, but we bet you just couldn’t put a price on replacing all of your furniture, your possessions, or even your family heirlooms. This is why renters insurance is worth it. If you take stock of everything you have and take photographic evidence of what you have in your rented accommodation, you should be able to claim money back to rebuild your life. If not, you’ll have to start from scratch.

What will renters insurance cover?

If you are currently living in a rented property, there’s a high chance that your landlord will already have insurance taken out on the property and your livelihood – but this insurance doesn’t cover everything. By taking out renters insurance, you will be able to make your life more secure, as it will cover damages from theft, fire, smoke, explosions, lightning, vandalism, water damage and more. Renters insurance will not only cover the property in general, but it will also protect your belongings from these factors.

What is the difference between a cash value policy and a replacement cost value policy?

If you are debating taking out renters insurance, you need to know what the different policies are, and in most cases, you have two choices; a cash value policy or a replacement cost value policy. The difference between these two is that a replacement cost value policy will normally cost you more to take out… but can be invaluable if you are devastated by theft or damage of any kind. This is because a cash value policy will only allow you to replace your items at the current retail price. This means that if you bought a $1,5000 Apple Mac in 2015, you would only receive compensation for what the laptop is worth now – which means you will normally receive less to buy a brand new laptop. If you choose to take out a replacement cost value policy, you will be able to receive compensation for like-new prices that will allow you to completely replace what you have lost.

Of course, renters insurance will never cover you for every single aspect of your rented property or every single belonging in your house – but it’s a start. While it is your choice to take it out and spend a bit of extra cash, shelling out the price of a takeaway pizza once a month could be the difference between living in an empty shell with no possessions to your name, or the money to start from scratch and rebuild your life with the insurance payout. It’s your call!