If you are like many renters today, you probably have a roommate that is splitting the bills with you to help you make ends meet. Many Americans do this as a way to help them save up enough money for a down payment on a home of their own. Of course, if you are renting a house, apartment, or condo, you should have some form of renter’s insurance.
Your Landlord’s Insurance Does Not Cover You
Many renters labor under the mistaken idea that their landlord’s insurance covers them as well. The reality is that their insurance policy is only there to protect the landlord’s interests. Thus, if your rental home is damaged or destroyed by things like fires, hail, flooding, or anything else that is covered, their insurance will cover the physical damage to the property.
What it does not cover, is anything that belongs to you or your roommate. So, for example, if the rental unit is damaged or destroyed by a fire, your landlord is covered for the cost of the repairs or replacement. Anything you or your roommate happened to have in the home that is damaged or destroyed is solely up to you to cover the cost of replacement.
What Does Renter’s Insurance Cover?
To start with, renter’s insurance in not a good place to try and save money, even though you may be trying to save for your down payment. Any savings you might manage to accrue by skimping on the cost of your renter’s insurance will quickly be lost if you lose everything in a fire. Depending on the policy you choose, your insurance should also offer liability coverage so that if anyone in your home is injured and you are found to be liable, they are covered.
Where does the roommate come in? Since you are buying a renter’s insurance policy, you and your roommate should purchase a policy together. Both of your names will need to appear on the policy in order for you both to be covered. Bear in mind that your roommate’s name doesn’t have to be on the lease as long as it is on the policy for them to be covered.
You will, of course, both need to sit down and create an accurate inventory of your possessions and their approximate value. This list should be kept either in a fireproof safe or in a separate location so that if something does happen to your rental home, your list is safe and sound so that you can provide it to the insurance adjuster. If you prefer not to save money with a joint policy, then perhaps each of you should purchase your own renter’s insurance policy.
Renter’s Insurance is Affordable
Perhaps the best part of renter’s insurance is that in most cases it is relatively inexpensive. Most monthly premiums are under $20 to $25 per month, depending on who your insurance company is and the total value of each person’s belongings. Most people spend more than this each month on coffee or soda.
Without the right coverage, you are likely to be on your own when it comes to replacing things like your television, furniture, clothing, jewelry, and many other possessions. Yet another problem that is going slow down how fast you can save enough to buy your own home.