Before writing off renters insurance as either unnecessary or too expensive, consider how much it would cost to replace your furniture, computer, clothing, food — all of your belongings — if your home were burglarized or damaged by fire, flood or a number of other causes.
Landlords insure the structure but not the belongings of their tenants. But peace of mind in the form of renters insurance can be had for about the cost of your favorite delivery pizza each month. Myths and assumptions about renters insurance sometimes stop renters from insuring their belongings, but understanding what’s covered just might change your mind.
Myth: “What I own isn’t worth insuring.”
Reality: Think about the total value of your belongings as if you had to start over. If your policy covers replacement cost, as policies from USAA do, your loss is covered for the cost of replacing your belongings, not their actual current value. In other words, your policy would pay to replace that hand-me-down plaid couch from Aunt Betty with a brand-new sofa.
“You can’t think of your belongings as ‘Everything I own is 10 years old, so I only need $5,000 of coverage,’” says Lisa Gaudi, director of property product management for USAA.
Some items, such as jewelry, silverware and firearms, are subject to limits on loss due to theft, Gaudi notes, adding that Valuable Personal Property policies can be purchased to extend coverage for certain high-dollar items.
Myth: Renters insurance is too expensive.
Reality: The average USAA renters insurance policy premium is $215 per year, and the average coverage amount is $28,000. That’s just under $18 a month.
“For the cost of purchasing one pizza a month or a cup of coffee every week, it’s really inexpensive,” Gaudi says.
Myth: Property is covered only in my residence.
Reality: Policy terms and coverage vary, but USAA policies cover your personal property whether it’s in your residence or not. That means your laptop is covered in your car, on vacation — anywhere in the world.
Myth: Renters insurance only covers losses for theft or fire.
Reality: While theft and fire are two types of loss covered by USAA renters insurance policies, there are actually 17 categories of loss covered. These include flood and water, windstorm and hail, vandalism, earthquake, volcanic eruption, and even damage caused by riots or falling objects.
USAA renters policies also include $100,000 liability coverage and $5,000 medical payments for slips and falls. Even though pets aren’t covered by the policy as property, you are covered if your pet injures someone.