Do You Need Renter's Insurance?
Renter's insurance assures you that you're protected against the damage or loss of personal property
when you rent an apartment or house. Your landlord may have insurance that protects the physical
building in which you reside, but this insurance will not cover your personal property. In fact, it's not at all
uncommon for landlords to require the purchase of renters insurance prior to renting or leasing. This is
prudent for both the renter and the landlord, protecting both from the possibility of lawsuit by alleviating
each other's respective liability.
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
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 that 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
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
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 an additional premium, it's usually
worth the relatively small increase in cost.
Here are a few ways to save on renters insurance. 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. It
provides protection against legal claims that you may be obligated to pay, such
as injury, sickness and death. It is, however, limited to the amount of liability
coverage provided by your policy.
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. If you're looking for cheap renters insurance, it is
not uncommon to see policies with premiums that are less than $20 a month. And, thanks to the internet,
you can get a competitive online renters insurance quote with relative ease. Always make sure to go with
a reputable renters insurance company when choosing a policy. This eliminates any surprises should the
unfortunate need arise.
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