Do you need renters insurance?
If you’re renting a place to live - whether a house, townhome, or apartment - you may have wondered if you need to have renters insurance. Or you may be just starting out or otherwise feel that you own very little worth insuring. But you probably have much more than you realize.
It’s unlikely that you went out in one day and purchased every single thing you need to make your place a home - it was probably accumulated over a long period of time. Think of what it would cost to go out and replace all your clothes, personal items, sporting equipment, electronics, appliances, furniture - it’s likely to be very expensive. Having a renters insurance policy in place is an affordable solution that can help alleviate some of your financial burden in case of damage or theft.
What kind of protection do you get with renters insurance?
Unlike homeowners insurance, which covers both the physical dwelling and the personal property you have in it, renters insurance does not cover the physical dwelling. The property owner (your landlord) should have their own property insurance to cover the building itself.
But similar to homeowners insurance, renters insurance covers damage or theft of your belongings. This coverage extends to your property even if it isn’t physically in the home at the time of loss - for example, valuables that are stolen out of your automobile.
Also similar to homeowners insurance, renters insurance protects you from liability in the case that someone is hurt in your home. If a guest slips and falls, the renters insurance policy would cover those medical expenses.
A standard renters insurance policy doesn’t cover you in the case of a natural disaster such as earthquake or flood, so you may need to purchase an additional rider if you live in an area prone to earthquakes or floods.
What type and how much coverage do you need?
Take an accurate inventory of all your belongings to decide on how much coverage you need. Consider how much it would cost to replace everything you have, not just valuables - a big fire could leave you with nothing.
Some personal property limitations exist in renters insurance policies. For example, some items that typically have a specific dollar limitation: money, securities, watercraft, trailers, jewelry, silverware, gold-ware, pewter-ware, and business property. Be sure to talk to your agent about items with specific limitations.
A standard policy covers the actual cash value of your belongings at the time of loss. The actual cash value generally amounts to what you could get for your items if you sold them in their used condition.
Since it would cost much more to actually replace your belongings than their used market price, you might consider replacement cost coverage. This kind of coverage will cover the cost to replace your items with a like qualify and kind item. You must actually replace the item to get the replacement cost.
Where do you get renters insurance?
If you own a car or recently sold a home, check with the company you have your auto policy or homeowners policy with. Most big name insurance agencies offer renters insurance, and you may qualify for a discount if you currently have another type of policy with them.
And many other insurance companies can be found on the web. Check around and get a quote from several companies - being sure to compare the same kind of coverage - before settling with a particular insurance agency.