Is It Worth It To Save Money By Not Paying Renter's Insurance?

These days, people are cutting costs wherever they can to keep up with rising prices. For renters, one expense that might seem reasonable to skip is renter's insurance. Perhaps you think your belongings aren't valuable enough to make it worth it (they probably are). Or maybe you assume your landlord's insurance policy will cover any damage to your home (it probably won't). Whatever the reason, you're not alone — almost half of renters lack coverage. But if you are in this boat, you may want to reconsider. Not only can renter's insurance save you a lot of money if something were to happen, but it's also probably a lot more affordable than you think.

Renter's insurance can help protect your home and your wallet from losses caused by theft, fire, or other damage. It also protects against personal liabilities such as medical bills or legal fees if someone injures themselves in your home.  If a fire or other damage occurs in your rental, repairs can be expensive — especially if you've invested in clever renter-friendly upgrades. And if someone were to sue you — for instance, if they were to slip and fall in your home — those costs could be catastrophic. Renter's insurance can provide you with peace of mind and possibly save you a significant amount of money if the unexpected were to happen. And while it's a common myth that rental insurance is expensive, the average cost of a policy is just $171 a year, or about $14 a month, according to the Insurance Information Institute.

The price of renter's insurance can vary considerably depending on a number of factors, including the amount of coverage you need. For personal property, such as jewelry, clothing, and electronics, the most common coverage amount is $20,000 to $30,000, while the minimum liability coverage for most policies is typically $100,000. Your past claims history, as well as where you live, also influence the cost. In Mississippi, which has the most expensive premiums, the average cost is $262 a year, while in South Dakota, which has the lowest premiums, the average is just $129. Even in the pricier states, it's still a bargain compared with homeowner's insurance, which costs on average $2,110 a year, or $176 a month, according to NerdWallet.

You should be aware that there are some things that a renters' insurance policy is unlikely to cover, including damage from floods or earthquakes. If you live in an area where these events are common, you should look into getting additional coverage. An infestation of pests that do the most damage, such as termites, is also likely to be excluded from a standard policy, as are high-value items, like an expensive piece of jewelry. If you're considering purchasing renter's insurance, make sure you have a good sense of the type and amount of coverage you need. You should also get quotes from multiple companies to make sure you're getting the best price available.