There are several things to know before purchasing a renter’s insurance policy. These policies are one of the best investments a renter can make, but they’re not all the same. Different policies have different levels of coverage, different terms to be met and other stipulations. Here are some helpful answers and how-to’s to get you on your way.
Why Renter’s Insurance?
If your property is stolen, lost or damaged, your renter’s insurance will replace it or compensate you based on how you have the policy set up. The landlord is not responsible for your possessions, or any accidents that happen to your guests within your apartment or rental property. Rental insurance is your only protection. Some landlords require you to have a renter’s insurance policy in place before you can begin living in the property.
What does my renter’s insurance cover?
In short, it depends on your policy and your insurance company. This is one criterion to help you choose which insurance company to choose. Choose one that offers the most coverage at the least amount of cost to you. Also, choose coverage that reflects the area you live in; if you’re in a flood prone area, flood insurance is a good idea, and likewise, high crime rate areas would require more coverage in the face of theft.
How does my policy pay when I need it to replace my stuff?
There are two ways: Cash value and replacement cost. Cash value will pay you what your item would be worth today, while replacement cost will give you the amount needed to purchase the item or similar item on today’s market. Also, replacement cost will only give you cash if you replace the item.
What’s a deductible and what does it mean?
A deductible is the amount you have to pay before your insurance kicks in. Like health insurance, most renter’s insurance policies have a deductible. The higher your deductible, the lower your insurance payments, but the more you’ll have to make up on your own in the event of theft or damage to your items.
What else does my insurance cover?
Liability for one thing; if someone comes to harm within your apartment or house, the landlord cannot be held responsible. You will have to cover any medical bills; your insurance will payout for this. In addition, some policies will pay a stipend to cover living costs if you have to live somewhere else due to damage and some will pay for items lost while traveling. There are other add-ons that each company offers, but they differ greatly from company to company.
How do I get renter’s insurance?
Check with local insurance agencies. Renter’s insurance is widely available, but varies greatly by insurance company, so shop around for the best coverage.