Most of us first think about insurance with our first car or home, usually because the law or bank requires it. Although renter’s insurance is usually not required, it is just as necessary to have. Not only will renters insurance protect your personal items, it will also give you help with temporary housing and liability protection such as medical expenses for people on your property or a lawyer if you are sued by someone unintentionally injured by you. Once you determine your need for renters insurance, knowing your options will help you choose the best policy.
If the ceiling in your rented property is damaged by wind or hail in a storm, of course the ceiling is covered by your landlord. But what about your brand new stereo and TV that was damaged? Also, while the ceiling is being fixed, do you have enough money to quickly find another place to stay? These are the types of things that would be covered by your renters insurance policy.
Along with personal property coverage and living expenses, your renters insurance policy will also cover your liability or damage you cause to others or their property. For example, your girlfriend comes over to visit and she slips on the ice outside your door. The same walkway that is your responsibility to keep clear! Your girlfriend needs medical attention and decides to sue you! Renters insurance can’t help with your broken heart, but it will help you pay for your ex-girlfriend’s medical expenses and a lawyer.
In determining whether or not you need renters insurance, the questions you need to ask yourself are:
How much would it cost to replace my belongings if they were damaged or stolen? And can I afford to replace them?
Depending on your answer, renters insurance may be an easy choice, providing you with the protection you need. Either way, it’s reassuring to have the peace of mind that comes from being protected.
Things to consider before purchasing rental insurance:
- How Much Coverage? – The amount of renters insurance you choose will have the biggest impact on price of coverage. It is important to insure against all of your property. Remember, you’re not just insuring against theft. In the case of a fire, for example, you could lose everything.
- Deductible – The amount of the deductible premium you’re willing to pay will have a major impact on the premium costs. The higher the deductible, the lower the cost of home renters insurance.
- Actual Cash Value (ACV) – Type of coverage that will pay for what the item was actually worth at the time of loss. This basic coverage payout is determined by the cost to replace, minus depreciation.
- Replacement Cost – Type of coverage that will provide for the actual replacement value of the item with no deduction for depreciation. Although replacement cost coverage comes at additional premium, it’s usually worth the relatively small increase in cost.
Many insurers will offer discounts, if you have some of the following:
- Monitored fire or burglar alarms
- Fire extinguishers
- Sprinkler systems
- Dead bolts on all exterior doors
- Auto insurance with that provider
If you own a dog, however, it may add to your premium. Due to liability issues, some insurers won’t even offer insurance if certain dog breeds are owned. This discrimination is exclusive to certain larger working dog breeds. It’s unfortunate because many of these breeds are good-natured and provide a great deterrent to theft. Yet, in the eye of the insurer, they’re a risk. The insurance companies that do offer coverage for these breeds, will often do so at a premium.
Flood and Earthquake protection is not commonly included on rental insurance policies. If you live in an area where these natural disasters are more common, you may want to purchase an additional rider.
Liability coverage is most often a standard feature with renters insurance. This can prove invaluable in case of an accident, such as a slip or fall by a guest.
In order to avoid any disputes with your insurance company, it’s recommended that you take an inventory of your personal items before purchasing rental insurance. This can be done by video taping or photographing each room of your house. It is important to keep all receipts for any major purchases, as well. The above should be kept offsite, in a fireproof safe or safety deposit box.
Fortunately, renters insurance is relatively inexpensive! Let’s talk about your renters insurance needs.