Insurance Services: Renters Insurance

Home insurance is essential for people who own a house. But what happens if you’re a renter? Yup—there’s an insurance for that too. Renters insurance helps to protect your belongings and your liability, plus many landlords require that tenants purchase some form of renters policy.

Ready to learn more about renters insurance? Read on!

What Is Renters Insurance?

Imagine you’re renting an apartment and a fire occurs, or a hurricane. The good news is, you’re off the hook for the cost of repairs to the building. That’s the landlord’s responsibility. But what about the cost to repair or replace your personal belongings?

That’s where renters insurance comes in.

Renter insurance helps to protect your personal possessions in case of theft, natural disaster, or another type of damaging event such as vandalism or fire. With renters insurance, you’ll get financial assistance to repair or replace items of value.

What’s Covered?

Every renters insurance policy is a little different, but in general you can expect coverage for personal property that’s damaged or destroyed due to an incident outside of your control. Damage from theft, smoke, falling objects, snow, lightening or a malfunctioning household appliance is usually covered, while damage from earthquakes and flooding is usually excluded—so if you live in an area prone to more severe natural disasters, you might consider tailoring your renters insurance policy to match.

In addition, renters insurance will often pay for your accommodation (plus meals and other expenses) if you’re forced to leave your apartment for a certain period of time due to a disastrous event. Renters insurance typically offers liability protection as well, which means that if you’re responsible for damages or an injury at your rental property, you’ll be in a better position to afford legal fees or someone else’s medical bills.

How Much Insurance Do I Need?

Renters insurance is fairly inexpensive compared to other types of insurance, usually coming in at under $20 per month. With that said, it’s always a good idea to check your coverage limits. A policy that offers a lower monthly premium will likely have a lower coverage limit, meaning that your potential payout might not cover the cost of all necessary repairs or replacement after an incident.

It’s also important to consider if you want actual cash value coverage, or a replacement cost policy. Choosing renters insurance with actual cash value (ACV) means that if an item is damaged or destroyed, your insurance payment will be based on the value of your item today. A television which cost $450 when you bought it might be calculated at a value of $100 a few years later, due to depreciation.

On the other hand, a replacement cost policy will pay out whatever it takes for you to replace the item in question to the closest possible type and quality. Replacement cost policies typically pay out more money than actual cash value coverage—which may mean a few more dollars on your monthly premium.

What Else to Know?

It’s a good idea to keep an inventory of your belongings; especially when it comes to high-value items. Keeping up-to-date maintenance records may also be useful if you need to make a claim. Take pictures of your stuff, or do a walk-around video of your apartment a couple times per year. That way, if the worst should happen, you’ll have something to reference in case you can’t recall exactly the items which were damaged or stolen.

In addition, consider if you want any add-ons to your renters insurance. Many providers offer additional coverage for identity theft, high-value items such as expensive bicycles, jewelry or electronics, and extra protection to cover flooding caused by storms. Depending on your location and circumstances, it may be worth the bump in premium to take advantage of this supplementary coverage.