If you're trying to trim your household budget and your renter's insurance policy is up for renewal, it may be tempting just to let the policy lapse. After all, if you haven't suffered a loss that would trigger benefits under your policy, you may feel as if you've been paying for nothing. Other monthly expenses, such as the bills you pay for continued phone service or electricity, by contrast provide you with clear benefits that you use and enjoy every day.
But not renewing your renter's insurance policy may be a big mistake. Remember, unlike utility bills and other expenses, renter's insurance is something that you pay for but hope never to benefit from. That's because if you get money from your policy, it means someone got hurt or property was damaged.
So, how do you justify not cutting your renter's insurance policy when times are tough?
First, keep in mind that paying a small premium each month means you'll avoid having to pay hundreds, if not thousands, of dollars later to replace electronics destroyed by an upstairs leak or furniture lost in a fire, for instance, or fully compensate a visitor for her injuries. As much as you'd like to stop paying your premiums, at $10-$25 or so per month they pale in comparison to what you might have to pay in the unfortunate event of a loss.
Second, if year after year goes by and you've never needed to use your renter's insurance policy, don't feel as if it has been a waste. Paying a little to prevent the possibility of having to pay a lot is nearly always a smart move -- especially in tough times. When you have a renter's insurance policy in place, you get to enjoy living in your apartment with the peace of mind that comes with knowing that you're covered. There's certainly a value in that.
If you think you might be overpaying for your current policy, follow some money-saving tips to lower your premiums before renewing. For example, do some comparative shopping and consider switching insurers if another one offers you a better deal.
Also, whether your policy is up for renewal or you're just thinking about purchasing your first policy, read the answers to frequently asked questions about renter's insurance.