Each year, as a fresh batch of freshfaced graduates emerges from the country's colleges all ready to take over the world, there is one essential life skill there that they are just not taught to pay attention to they completely leave out how renters insurance can be a lifesaver. There is a surprising amount of misinformation out there that has the effect of directly discouraging any intention anyone may have about buying a bit of inexpensive insurance protection for oneself. As such, we all need to talk about this a lot more because going without even a little bit of coverage can be disastrous.
One of the most pervasive myths to do with renters insurance out there has to do with how much money is involved. People tend to underestimate how much their stuff is worth, and they tend to overestimate how much renters insurance can cost.
It is very easy for a young person to look at his stuff and think that there isn't enough there to warrant something as serious as insurance. How much can a few books, a computer, a few clothes and a couple of kitchen appliances actually be worth, they ask themselves. What sense does it make paying hundreds of dollars a year to insure stuff like this?
Well, to begin with, even the belongings we've just talked about can really add up to thousands. And then, it doesn't cost hundreds of dollars to buy renters insurance. A hundred is more like it. For about $150, you could probably get $30,000 worth of renters coverage. But where do people get this idea that it can be expensive?
Usually, they just look at what homeowners insurance costs, and they get the idea somehow the renters insurance has to be not far behind. But homeowners insurance is not the right comparison to make. A homeowner has this whole building to cover. Should anything happen to the physical structure of the house, the insurance company has to shell out tens of thousands of dollars.
Understandably, insurance premiums have to be high-priced if they are to protect something as large as a house. A renter on the other hand has practically nothing to cover only his belongings that are worth perhaps $20,000 or $30,000, if that. A premium worth $150 a year or less, should easily cover that. That works out to what $12 a month?
Another item of fallacy here, has to do with how people tend to feel that it isn't really up to them. Sometimes they think that since their roommate has renters insurance, they don't need to bother with it; at other times, they think that since their landlord has homeowners insurance, that should be covered.
Well, right away, homeowners insurance for the landlord only covers the building and the possessions in the house that belong to the landlord. As for the roomie who is insurance, that might help, if you've talked it over with him (or her).