If you’re starting to live on your own for the first time, or moving into a new apartment, you may be faced with the decision to get renter’s insurance. I was in this situation in at the beginning of the summer and decided to hold off to “save some money”. Needless to say, this was a HUGE mistake. An electrical fire in the garage of my apartment complex ensued, and while my unit didn’t burn – smoke damage ruined most of my clothing and furniture. If I could go back in time, I would gladly spend the $20 a month for the insurance to replace the cost of all my belongings.
Renter’s insurance tends to cover loss for damage of items in the home related to fire, theft, vandalism, plumbing and electrical malfunctions. You may be a very cautious person, but when living in a community space like an apartment complex or townhouse you can never be too sure if your neighbors are as careful as you.
There are two different types of renter’s insurance, actual cash value and replacement value. Actual value pays what the property is worth at the time of damage, and replacement value being the cost of replacing the items. Unless you have several expensive items such as high-quality jewelry, antiques or valuables, actual cash value renter’s insurance tends to be 15% less than actual cash value coverage. If I had bought the actual cash value renter’s insurance when I first moved into my apartment, there would be no need to repurchase my clothes and furniture – they would be taken care of!
The National Association of Insurance Commissioners places the average cost of renter’s insurance on average at $15 to $30 monthly. In the grand scheme of things – it’s better to be safe than sorry: $20 now to save $2,000 in your future? Seems like a no-brainer.
Contact Graeme at G.S. Woods Financial Solutions LLC to get an evaluation of your renter’s insurance as a part of a risk management consultation or as a part of a financial plan!
Written by: Cady Ruth Stoever, G.S. Woods Marketing and Communications Associate