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Apr 25, 2018

Homeowner’s & Renter’s Insurance, Am I Paying Too Much?

By Lindsay Goldwert

How can you tell if you’re paying for coverage you don’t actually need?

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If you’ve never even thought about buying a homeowners or renters insurance policy, consider this as a reality check. While most people are already stretching their budgets thin, the cost of a policy is likely less than you think, and can save you a considerable amount of money in the event that catastrophe strikes.

Your primary concern when shopping for a renters or homeowners insurance policy is the cost. That, or you’re worried that you’re already spending too much on your current coverage.

How can you tell if you’re current policy is too expensive, or you’re paying for coverage you don’t actually need? Start with a quick review.

Do an insurance policy review

Start with a couple of basic questions. What does your current policy cover? And given your needs, is it too little or too much? What would you actually need in the event that everything you owned was destroyed?

Sure, reducing your coverage can lower your monthly cost. But you’ll want to make sure that the total coverage is still enough to replace your belongings if you actually need to make a claim, and that the specific things important to you are actually covered under the policy.

On the other hand, if you have an expensive policy, you could be paying for too much coverage — or, coverage that you don’t actually need. This is why it’s important to take a closer look at your policy to see what you’re paying for.

What are you paying for?

Make sure you understand the difference between the Renter’s insurance vs. Homeowner’s insurance.

A renters insurance policy covers your personal property, meaning the belongings you have in a home or apartment that you rent. Homeowners insurance, on the other hand, is coverage for your house or property in addition to your personal belongings.

If you’re a renter, you know that many landlords require you to have a renters insurance policy before you can even move in. And if you cancel that policy, they may not allow you to renew your lease.

While your landlord may be responsible for insuring the building you live in (be it a house or apartment), purchasing additional coverage, in the form of a renters insurance policy, can cover you in the event that your personal property is stolen or destroyed.

Foregoing insurance will save you now, but could cost you later

Take stock of your personal property and belongings. Odds are, you have more stuff than you think. What would you do if you were to lose it all?

Your computer, phone, TV, Playstation, clothes, bed, collectibles, and everything else — it could all be lost in a break-in, or destroyed by a fire. Do you have the money to replace all of it? Do you have a back-up plan?

Renters or homeowners insurance can be that back-up plan. It’s a small cost now for huge potential savings later. And it’s hard to put a price on peace of mind.

Get Renters or Homeowners insurance

With Lemonade*, you can get a policy starting at $5 a month.
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Written by

Lindsay Goldwert

Lindsay Goldwert is an author and freelance personal finance writer, as well as the host of Spent podcast


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