Home Insurance Guide

You should always have either renter’s or homeowner’s insurance, always, without exception. In most cases, you will be required to have renter’s insurance if you are renting from any large corporation because it takes a lot of the risk away from the corporation’s insurers. If you’re a homeowner with a mortgage, the lender will require you to have homeowner’s insurance in order to protect the collateral on the loan (your house). But in those infrequent scenarios where renter’s and homeowner’s insurance aren’t required – say a lax landlord or you own your home – you will want to pay the low premiums to protect yourself from catastrophic loss.

Renter’s insurance typically costs practically nothing. Unless you own a lot of electronic equipment, and even then, the premiums are typically less than $10-$15 per month. Remember, insurance protects you from catastrophic loss. You have no idea how the apartment is kept up by the landlord year to year. Sure they slap up some paint and the place looks clean but is there a leaking pipe behind a wall that no one knows about? All you need is a pipe to burst, douse your nice new 56″ plasma TV, and your day is ruined. What if some punk kids peek through your window, see that XBox 360 you have and decide they want it? Renter’s insurance protects against theft (though the XBox 360 might be less than your deductible) of your property regardless of where it is (so if someone broke into your car and stole something, you’re still protected).

As for homeowner’s insurance, this is an even bigger no brainer. Say your homeowner’s insurance premiums were $100/month, it’s protecting an asset that worth probably 3000 times that. My insurance premium to protect my home, bought for $295,000, is a mere $50/month. If those Capital One vikings lay siege to my townhouse, I’d be protected. (Actually technically I wouldn’t if there was a war going on, homeowner’s insurance doesn’t protect against silly things like war and nuclear explosions or alien attacks).

Considering most people pay far more for auto insurance (also because the accident rate with cars is much higher than property), it makes total sense to get renter’s or homeowner’s insurance. But again, always shop around for the best rates.