Renter’s Insurance: Something to Think About for Your Financial Health

You might not realize this, but insurance is an important part of maintaining a healthy financial situation.

One day you’re following a solid financial plan toward your next goal, and the next you’re drowning in debt because your water heater broke and flooded the living room, a hurricane tore the roof off or your kitchen curtains caught on fire and gutted the whole room. Having the right insurance in place in case of emergency can protect you from bankruptcy.

Renters are often under the mistaken notion they don’t need insurance because they don’t own their home. Here are some reasons to reconsider:

It’s not that expensive.
When you sign your lease, you need first and last month’s rent and maybe even a pet deposit. You don’t want to think about taking on another expense at the same time, but renter’s insurance can cost as little as $20 a month and save you thousands of dollars if you ever need to make a claim.

Your landlord may require it.
Savvy landlords make it clear that their insurance does not cover a tenant’s possessions. To avoid any uncomfortable situations after you overflow the bathtub and flood the bedroom, many landlords require their tenants to carry renter’s insurance. Having your own insurance policy also demonstrates a financial maturity that landlords like to see in a tenant.

Your possessions are worth more than you think.
You might not think your stuff is worth much, but imagine what would happen if just one room of your home were destroyed by fire. Do you have the extra money in your budget to buy a new couch, and carpet, and lamps and window treatments all at the same time? What if the smoke damaged all your clothing? What would it cost to replace your entire wardrobe? Renter’s insurance is specifically designed to help you with all those costs.

Clean up takes time.
Even a small incident where the roof leaks and water runs down your walls could take weeks to repair. The mold growing unseen behind your wet walls could make your home uninhabitable. Renter’s insurance could cover your hotel bill and maybe even restaurant meals while your home is being repaired, saving you a lot of money.

Emergencies don’t happen often, and you may never need to make a claim on your renter’s insurance policy. But the day you find yourself standing in the street watching the fire department do their job at your residence, you’ll be glad you took on that extra expense.