Renters Insurance Q&A Every Millennial Must Read

If you are a millennial, then chances are pretty good that you rent instead of own. According to a recent article from USA Today, the generation born in the early 1980s and early 2000s prefers renting because they don’t have to go through the intensive process of attaining a mortgage; they get to enjoy a living space that comes with built-in amenities (often amenities that would be expensive and time-consuming to upkeep on their own); and upkeep/maintenance is largely handled by a landlord.

While renting makes sense to younger generations, who may be more concerned with career and debt than homesteading, there are still some questions when it comes to the value of renters insurance.

With a low adoption rate of renters insurance among this group, we thought we’d answer some key questions surrounding such a policy with the help of our friends at Nationwide. Here goes!

 

Are my belongings valuable enough to require renters insurance?

Many millennials make the mistake of assuming that because they don’t seem to own a lot of personal possessions, the value isn’t enough to protect via renters insurance. Nationwide cautions that this is line of thought is a big mistake.

“Your individual possessions might be easily replaceable, but the average renter owns several thousands of dollars’ worth of belongings in total,” the company claims. “Replacing them would cost much more than the annual cost of renters insurance. Besides covering your belongings, renters insurance can also provide peace of mind for those unfortunate instances when you get sued as a result of a covered event.”

 

How expensive is renters insurance?

For a generation that is consumed by student loan debt and iffy job prospects, the idea of adding a renters insurance policy might seem impractical. However, that couldn’t be further from the truth. According to Nationwide, the average cost is “about $20 per month” for coverage, which equates to the cost of subscribing to Hulu Plus and Netflix Instant, two very popular purchases among the streaming generation. Over the course of a year, that would mean an expenditure of $240.

To put it in perspective, the laptop or television one watches their favorite TV and movies on would cost much more to replace.

 

What will a landlord cover?

When it comes to responsibility, landlords take on building maintenance and insurance for structural damage. “This coverage doesn’t extend to your personal property,” Nationwide notes, “nor does it protect you from being liable for unintentional damage to your building.”

Bottom line: if you’re not paying $20 per month for a renters policy, then you’re leaving yourself vulnerable to more than just the theft or loss of personal property. You could even be held medically liable should a friend or acquaintance injure themselves at your apartment during one of those famous Thursday night ragers.

“There are unpredictable situations where your home or apartment may be damaged by factors out of your control,” Nationwide adds.

 

Lastly, does renters insurance protect belongings for their full value?

The answer to this one will depend on the policy, but Nationwide notes that they offer an optional Brand New Belongings coverage “that can help pay to repair or replace your covered belongings with brand new versions, regardless of age or condition.”

Check with your insurance company to a) know what your renters insurance policy does cover, and b) see what riders are available that are similar to Nationwide’s BNB.

 

In Summary

Renters insurance is often treated as an unnecessary purchase by cash-strapped students and recent graduates, who are just trying to get their lives started. However, the cost of not having it, is ultimately too much to bear. If you’re on the fence regarding this policy, then make that next move. Your belongings, your security, and your future might depend on it.

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