I imagine I am in a similar situation to many millennials. Every month, I pay rent while looking at the Western Washington housing market wondering if home ownership will ever be attainable for me.
In trying to save up for future expenses – potentially a pet, wedding, or house – I had to take a hard look at what is and isn’t essential so I can have the funds for my wants.
My monthly budget has a few categories, most of which boil down to the things I need to live – food, water, housing, transportation – and things that enhance my life, like entertainment, new clothes, and other wants.
Where does renters insurance fit into these categories?
My apartment complex requires renters insurance, so logically it could fit under the needs section with housing. But what about if it wasn’t required?
In Washington state, renters insurance costs as little as $15 a month – less than the cost of Netflix’s Premium Plan. But if my landlord didn’t require tenant insurance, would I choose streaming TV shows and movies or an insurance policy as one of my few life-enhancing expenses?
A little bit about me: I like instant gratification. Unless something gives me an immediate benefit, I generally don’t like paying for it. I’ll also be the first to admit I get many hours of entertainment from streaming services, including Netflix.
But what does renters insurance do for me? What does renters insurance even cover? Do I really need renters insurance? Before I became a licensed insurance agent at McClain Insurance, these were questions I couldn’t quite answer.
Now I know that while renters insurance doesn’t provide over 125 million hours of content, it is a better monthly expense than Netflix. Here are three reasons why renters insurance is more important for millennials to have than Netflix:
Reason #1: Renters Insurance Protects Your Stuff
Unlike a streaming subscription, renters insurance protects your TV, sofa, blankets, and popcorn bowl, along with all the other personal belongings that help enhance your quality of life. This includes everything from electronics to kitchenware.
The McClain Insurance team recommends a single person has at least $35,000 in personal property coverage for their personal belongings. If you live with a partner or significant other, the McClain Insurance team recommends a minimum of $50,000 in property coverage for your apartment’s contents.
This may seem excessive, but most of us amass our possessions slowly over time. What would it cost to replace everything at once?
I cannot even begin to know how many books, socks, or board games I have, let alone how much everything together would cost to replace new.
(Note: not all renters insurance policies are created equally, and oftentimes you get what you pay for. Inexpensive, stripped-down renters insurance policies may provide what’s called “actual cash value coverage.” That’s insurance lingo for whatever the depreciated, actual cash value of your property is at the time of loss – i.e. the value for which the property could be sold. If you have a decades-old hand-me-down couch, you’ll receive a minimal payout. This is why it’s so important to work with a licensed agent who can explain what you’re covered for and what you’re not. Contact us so we can help customize a policy that’s right for you)
Thankfully, if my laptop is stolen from my car or my furniture is destroyed in a water leak, renters insurance will help get me back to normal.
Reason #2: Renters Insurance Protects Your Finances
Renters insurance helps protect your assets, including
If you’re like me and enjoy entertaining friends, renters insurance is a must. Nothing ruins a party faster than someone getting hurt. If it happens because they stepped on that stray LEGO block or because their sleeve caught on fire from the scented candle in the bathroom, your renter’s policy can help pay for their medical expenses and any resulting liability if you were negligent for their injuries.
If your cooking adventures set the house on fire, your bathtub floods your neighbor’s unit, or your dog bites the mail person and you don’t have insurance, you will be held liable, and they will try to sue you for as much as possible to make it right. I don’t know about you, but my budget couldn’t handle a sudden muti–thousand-dollar expense. Any savings I had for a pet, a wedding, or house would be devastated. I probably would end up needing to take out loans to pay off the expenses, sending me into a cycle of debt. Forget about the life enhancing aspect of the budget, something like this would put me in survival mode and likely would have me looking to my parents hoping they haven’t finished turning my old bedroom into an office. With renters insurance, if I am sued or held liable the policy has $500,000 in liability coverage, which is far more than I could pull together in short notice.
Reason #3: Renters Insurance Protects Your Independence
While many people share their Netflix account with family and friends, with renters insurance you won’t have to move in with them. If water is coming in from an upstairs neighbor or the fire alarm goes off leaving you standing on the Everett sidewalk in your pajamas your renters insurance will help with a place to stay while the damage repair gets underway. Renters insurance means you don’t need to move back in with mom and dad or set up a GoFundMe to help replace your lost belongings. You can still visit your friends and family, but you won’t lose your independence so you can still try to find a way to watch your favorite shows that they hate.
Renters insurance is firmly in the need to live section of my budget, not the life enhancing section. The same can’t be said for Netflix. Contact us if you have any questions about renting and insurance. We are here to help!