Homeowners insurance not just for homeowners
If you own a home, it’s virtually guaranteed you have insurance to protect the dwelling and your possessions from loss. I say virtually because technically you could drop your coverage once you own your home outright. You’d be an idiot, but you could do it. What’s not virtually guaranteed is that you’re insured if you’re renting. This is a commonly overlooked aspect of personal finance for renters.
Renters insurance is a policy to protect your possessions from loss. But it’s also insurance for you from liability should anyone get hurt while in your home. This is important to understand. When someone comes into your dwelling, whether it’s rented or owned, they become your responsibility in a sense. If your dog bites them, it’s your fault. If they trip on their own shoelaces, it’s your fault.
The most common reason to buy renters insurance, of course, is to insure your stuff. Don’t overlook this insurance if you rent. Make sure that you have ample coverage and take a look at exclusions or limitations in coverage. For example, typically jewelry is capped at some low amount like $1,000. If you want coverage over that, make sure you buy a rider; they’re inexpensive. Other common exclusions are electronics and collectibles.
Just like homeowners insurance, it’s a good idea to document room-by-room what you have in as much detail as possible. I’m bad at this. I still haven’t done this and we’ve lived in our house for seven years now. (Memo to me…memo to me)
