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By Paul Schrodt
March 25, 2020
Kiersten Essenpreis for Money

Any renter should be prepared to upend their lives. That is, after all, the cost of being on a lease in your own home. But how many of us actually spring for renters insurance that would protect our most valued belongings in our most critical personal space?

Of course, as with any insurance, the burden of renters insurance comes with an added cost in your life. Whether that cost is worth it is of course up to you. But the benefits are hard to ignore.

The ‘Peace of Mind’ Factor With Renters Insurance

“I say this as a renter who has renters insurance: Virtually every renter should have a renters insurance policy,” declares Allison Kade, the editorial director at Fabric, a site and app geared toward connecting parents with life insurance policies.

“Dollar for dollar, the cost given the benefit just feels extremely worthwhile,” Kade adds of renters insurance. “It tends to be relatively inexpensive—my policies have typically hovered somewhere between $100 and $200 a year for coverage of about $30,000 in replacement costs for my belongings, plus coverage in case I need to pay for temporary accommodations if my home becomes uninhabitable. The cost of a few hundred bucks compared to tens of thousands of dollars if something were to happen to my place just feels very worth it to me.”

Other experts concur. The online personal finance company and loan provider SoFi’s certified financial planner (CFP) Brian Walsh is acutely aware of the potential meltdown scenarios for which renters insurance was devised.

“It’s worth having because, as with anything in life, things happen,” Walsh says. “You might leave the water on and flood your bathroom or forget to lock the door rushing when you’re late for work. For these everyday happenings alone, it’s worth it to have renters insurance, even if it just creates peace of mind.”

Everyone, though, has their own needs. The ultimate decision on renters insurance comes down to “your financial situation,” Walsh adds. If you’re especially low on cash, you may decide against the calculus of handing over more insurance premiums. But “the safety net of being insured is almost always worth it.”

If you’re still on the fence about renters insurance, you can look to the essentials of any insurance shopping.

“Deciding if renters insurance is worth it is all about evaluating the parts of your available policies and determining what’s right for you,” notes Lauren Silbert, VP and general manager of The Balance. She suggests inspecting “the dollar amount of coverage (is it enough?), your potential deductible (can you afford it?), the difference between actual cash value and replacement cost (do you have a lot of new stuff or older items?), and where you live (is your area prone to claims?).”

So, What’s a Good Renters Insurance Provider?

Some landlords actually require renters insurance, though many do not. Those stepping into this area on their own should know exactly what they’re getting.

“If you would be devastated that personal property was damaged or stolen or want to make sure you’re protected against any liabilities, like someone hurting themselves in your apartment, then renters insurance is probably a good idea,” Silbert advises. (The insurance applies not just to your books burning up, but also to cases of someone unintentionally getting harmed on the property.)

Luckily, the process of narrowing down the company that provides you with renters insurance and the specific policy is easier than ever in our digital finance age.

More modern online players like Jetty, Lemonade, and Goodcover allow consumers to streamline the process of finding and signing up for renters insurance that makes sense.

Walsh endorses Lemonade, a SoFi partner, for its “insurance powered by artificial intelligence and behavioral economics.” The platform, available in 23 states, “uses bots instead of brokers and algorithms instead of paperwork to make insurance instant, simple, and easy for consumers. Lemonade has also designed insurance as a social good, rather than a necessary evil. Lemonade takes a flat fee, pays claims, and gives what’s left to charities our policyholders care about.”

While a brand name only counts for so much, if you’re already an approving customer of an insurance company that offers renters insurance, such as State Farm, then you may find its plans advantageous.

But any insurance company deserves a good vetting. Kade points those curious about policies to third parties that specialize in rating insurance companies on how they deliver, including AM Best.

“As long as the insurer is credible, has good ratings, and the policy covers what you need at a price you can afford,” you and your home should be in the clear, according to Kade. “Those are my metrics.”

Your prized analog family albums may just agree.

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