The Best Purchase I Ever Made: Renters Insurance

I used to carry my life in my purse. Actually, it was actually my Mom’s purse. She gave me one of her really nice handbags because it was hurting her back. I loved that purse so much and wore it every day until the day I left it in a NYC taxi. It had my phone, all of my makeup, and an external hard drive with all of my documents, memories, and work files. Don’t ask me why I was carrying that around! 

No one called it in and the taxi dispatch said it was nowhere to be found. I got a random charge at a gas station before I cancelled my credit cards and I filed a police report. 

While this was a major bummer and pain in the a$$, this was all covered by my renters insurance. I called the insurance company to file a claim, meaning I reported what was stolen with a request for them to pay for the replacements. When you make a claim, you’re using the insurance. 

I got a check to replace all my makeup and get a new external hard drive. I still remember the judgment from the claims woman on the phone “wow, you spend a lot on your face.” Thanks! The purse had gone up in value a lot since 2008. Well my purse didn’t (no, purses aren’t usually great investments ha!) but the cost to replace it was a lot more so they reimbursed me once I bought the new purse and sent in the receipt. 

Having renters insurance protects your belongings in the case of theft and fire so you don’t have to pay to repurchase everything yourself. I have multiple friends who have had fires in their apartments and used renters insurance to repurchase their belongings, dry clean clothes that smelled like smoke, and even pay for a hotel or Airbnb while their apartment was being repaired. 

Long story short, it’s worth the investment. And luckily, it’s not too expensive. Here’s everything you need to know before signing up.

  • What it covers. Renters insurance covers anything you own no matter where you are. It was described to me in this way - if I picked up your apartment and turned it over, the insurance covers anything that would fall out. 

  • Exceptions. There’s always an exception, right?! Most policies have a few hundred dollar cash limit. Makes sense! There’s also usually a limit on high value items like jewelry or art. For example, jewelry may be covered up to $1,000. If you own something that exceeds that limit - like an engagement ring -you may want to look into valuable property insurance. 

  • Add roomies to the policy. While I made the smart choice and had renters insurance (yay to 25-year old Ashley!), I did make a pretty big mistake. A year or so later after my purse fiasco, my dear friend and roomie got pick-pocketed on a trip in China. When she called to make her claim, they shared that she couldn’t make a claim because she wasn’t on the insurance policy. The owner of the belongings that were stolen has to be on the insurance policy - it wasn’t enough that we lived together. The most frustrating part is that it would have cost absolutely nothing to add her to the policy (for the same total coverage). And because of my mistake, she wasn’t able to claim anything. She lost a family heirloom watch. Lucky for me, she’s an amazing human who is very forgiving and she didn’t disown me as a friend but I learned a lesson the hard way that I don’t want you to have to! 

  • Terms to know. First up, total coverage. Total coverage is the maximum the insurance company will pay out. To get an idea of how much coverage you’d need, think through a scenario where you’d lose everything in your home (a fire is a great example). How much would you want the insurance company to give you to replace all of your belongings? 

  • Next up, deductible. The deductible is how much you will pay out of pocket for a claim before insurance kicks in. So for example, my policy had a $500 deductible. If my purse and the contents of my purse were worth less than $500, insurance wouldn’t cover anything. 

  • And finally, liability protection.  Liability insurance protects you in case someone gets injured in your home or if something of theirs gets damaged something while in your home.  

  • Get a few quotes. You’ll want to get a few quotes to make sure you’re getting a good price on the insurance. To give you an idea of cost, according to insurance.com, the national average renters insurance rate for $40,000 of coverage, a $1,000 deductible and $100,000 liability protection costs $197 per year or $17 per month. Higher coverage or lower deductibles will increase your rate and lower total coverage and higher deductibles will decrease your rate. 

  • Read reviews. When push comes to shove, this policy is only valuable if you are able to make claims when something happens and get reimbursed for them. Read reviews to see if people had good experiences with the claims process or if there was fine print that had a lot of their items not fall within the policy.