Renters Insurance: Should You Buy It?

fire can destroy possessions in your apartmentFeeling like there's more month than your paycheck covers? You might need to consider some frugal lifestyle changes. But should you ax your renters insurance policy? Are the savings of $20-$40 a month worth it?

Anyone who has suffered losses from fire, flood or theft in their apartment will say "no way" to dropping it.

However, saving those dollars and "risking it" does seem tempting. Isn't this what a lot of young people are doing when it comes to health insurance? And don't most of us wonder what renters insurance covers, anyway?
One thing's for sure: The landlord's insurance does not cover the loss of your belongings. And did we forget to mention that burglary rates are higher in rented properties?

Your landlord's insurance will only cover the building in the event of a loss. While you might not think you have very much worth insuring, add it up. Statistics show that the average person has about $30,000 worth of possessions. It's not just the high-ticket items that you should consider -- it's the replacement value of everything. Do you really want to spend your next several paychecks replacing all you own if something were to happen?

Another thing to consider is where you might live if you experience a loss that makes your place uninhabitable. Sure, you can probably stay with friends for a while, but if you have renters insurance, your insurer will pay for your accommodations. That's a huge stress-reliever.

Recent fires at Mississippi State University left several people with serious material damage. Emily Cain, a communications instructor, told the student newspaper, The Reflector, "Living in an apartment, you can lose everything at no fault of your own. Too many people have lived that lately, and I think having insurance would definitely soften the blow if a crisis did happen."

So. no. Renter's insurance is not a racket. And, luckily, it's a lot cheaper than health insurance.
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