Why Seniors Need Renters or Homeowner Insurance.
As we age, we find ourselves investing in a number of things that provide an extra layer of protection: life insurance, a quality health insurance plan or supplemental insurance to Medicare coverage and even a home alarm system to protect us and our belongings.
But many seniors skip the obvious when it comes to shielding themselves against unexpected expenses – renters or homeowner insurance.
Pros and Cons of Coverage
Whether you own or rent your home, chances are, what would happen if someone was hurt on your property isn’t forefront in your mind. You may think it will never happen to you. And while it is true that not everyone will experience these kinds of unfortunate events in their lifetime, insurance is designed for the “what if” scenarios. Going without adequate coverage is not a gamble that should ever be taken.
Renters insurance and homeowner insurance shield against liability issues, but also protect your belongings from theft or damage.
For instance, if someone fell on your property during a particularly icy winter, or tripped over an uneven spot in your driveway, you are liable for their medical expenses should they pursue it legally. If your home experiences a fire or flood, your belongings are covered, as is the repairs for damage to your home.
One of the biggest pros of renters insurance – one that is not true of homeowner insurance – is that it is relatively inexpensive for the amount of coverage it offers. Monthly premiums for renters insurance run between $12 and $15 for most policies depending on the amount of coverage you desire. A knowledgeable insurance broker or agent can provide you with options for coverage that work with your budget and your specific needs.
One of the biggest cons of any insurance policy is the deductible. Both renters and homeowner insurance policies include deductibles. This is the amount of money you will have to pay out of pocket before the insurance policy picks up the rest. Be sure to set aside the amount of your deductible into a savings account so that it is accessible and available should you ever need it.
Seniors and boomers who are renting an apartment, condo or home may think they are protected under the landlord’s liability insurance. Likewise, retirees who have downsized to a senior living community, assisted living community or nursing home may mistakenly think that coverage extends to them and their belongings.
While it is true that every retirement or senior-focused community must carry liability insurance, and all landlords or commercial realty companies must insure their properties, that insurance only covers the common areas and physical structure, not individual residents or their belongings.
Let’s say, for instance, you are living in a retirement community, and the building where your apartment is housed is involved in a fire that destroys everything. It’s a terrible scenario to even fathom, but one that certainly could happen. The community’s insurance will cover the damages to the physical structure, but it will not cover the loss of your clothing, furniture, dishes or other personal items that were stored in the apartment at the time of the fire. The entire cost of replacement for those items is on you. Seniors who have renter’s insurance, however, would be able to file a claim with their insurance company to cover the loss.
Many retirees are living on fixed incomes, and have strict budgets for any savings they have acquired to help offset living costs for the duration of their retirement years. The last thing you want to do is spend your retirement savings replacing your belongings because you failed to properly insure them.
Another common misconception about renters and homeowner insurance is that it is expensive. According to the Independent Insurance Agents and Brokers of America (IIABA), an average renter’s policy costs just $12 per month for up to $30,000 in personal property coverage.
There also is a common notion that renters insurance doesn’t cover liability, only personal possessions. As with homeowner insurance, renters insurance plans cover both personal possessions and liability costs. The average renters insurance policy provides up to $100,000 in liability coverage, according to the IIABA.
Tips for the Best Coverage
Seniors and boomers have one major positive going for them when it comes to purchasing renters or homeowner insurance: discounts!
If you are a member of the AARP, there are a number of insurance companies working with the association to provide quality coverage at discounted rates. The AARP offers discounts on home and renters insurance, life insurance and other insurance products. More information can be found here.
It’s also important to make sure you are not over-insuring or under-insuring your property. Make sure any discount programs offered don’t reduce the amount of coverage to offset the savings.
Do you have tips or tools about renters and homeowner insurance? We’d love to hear about them in the comments section.