Graduated Learning: Life after College

I got my degree, I got a job…now what?

Renter’s insurance: Worth the expense? September 27, 2011

Filed under: Personal Finance — Stephanie @ 10:25 pm
Tags: , , ,

The last 5 years, I was living on the edge.  I was living in an apartment, but I didn’t have renter’s insurance.  Of course our landlord had homeowner’s insurance.  But if our home was ever broken into, or caught on fire, we’d be out of luck.

I never really thought of renter’s insurance as being very important.  I figured I didn’t own enough “stuff” to make it worth it.  Insurance is always a gamble (it’s something you hope you never have to use). But renter’s insurance covers more than “getting your stuff back”.  Yes, most plans help you buy replacement clothes, furniture, and other items lost due to theft or fire.  And that’s definitely important, if all your work clothes are suddenly gone!  But this past winter, a good friend of mine was living in his condo, and one of the other condo owners had a fire that spread to his place.  Between the fire, smoke, and water damage, his place was unlivable.  He had homeowner’s insurance (I’m pretty sure it’s required if you have a mortgage…the bank wants to protect their investment!)  This meant that his place could be repaired.  But it also meant that in the interim, the insurance company would help pay for living expenses.

So, I bought renter’s insurance.  I figured it was better safe than sorry.  If something happened to our place, I’d want to be able to replace things and find a place to stay.  Plus it sounds like they also provide some legal assistance.  I bought it with the company I already have my auto insurance with, so there was a multi-policy discount.  Woo!  The total cost for the year of insurance is $171/year.  Also during that phone call, I negotiated a better car insurance rate.  I switched from a $500 deductible to a $1000 deductible.  Not sure if that was the best choice, but I wanted to bring down my premium.

So, what do you think of renter’s insurance?  A good decision?  Or a bit of a scam?  Is it better to just have an emergency fund for replacing your stuff than paying an insurance company?  Do you have renter’s insurance?  Why or why not?

And do you think I made the right choice in increasing my auto deductible so I could lower my premium?  It could end up being penny-wise pound foolish if I end up filing a claim, since the extra cost would outweigh the discount in premium.  But I guess in this case, I could use emergency fund money to pay for small issues.


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