The Ins and Outs of Renter’s Insurance

Your apartment is flooded!  Or burned!  Or robbed!  Who’s going to pay for the loss and damage of your personal property?  The landlord?  The complex owner?  Probably not.  If you don’t carry renter’s insurance, it’s you!  So in addition to the stress of the situation, now you’re starting from scratch at a time when you can least afford it. 

For a variety of reasons, many people don’t even consider renter’s insurance.  But it certainly pays to have it.  Here’s you need to know to get the coverage that’s right for you:

The amount of coverage you need depends on how much your personal property is worth.  You may think your things aren’t worth much, but the average person has over $20,000 worth of stuff.  Items like furniture, electronics, computer, clothing, appliances, paintings, sports equipment, cameras, books, and jewelry all need to be insured for payment if stolen or damaged.

Determine your level of coverage by taking a complete inventory of your possessions.  Gather details of make, model, serial number, age and costs (both purchase and current replacement). Also take photos of these items for identification purposes.  Total the amounts of these items to estimate what your property is worth.  Then put your inventory in a safe place away from home – for example, in a bank safe deposit box. 

Valuable items such as antiques, jewelry, furs, and certain medical devices like hearing aids often will not be completely covered under a basic policy.  If you want to insure these, a separate policy called a floater should be added.  Floaters are usually very affordable compared to the replacement costs of expensive items.

Do an insurance appraisal on highly valuable items so you will have the appropriate coverage and documentation should they be lost.  Have an expert in the field appraise the value and include a photo for your records and the insurance company.

Though renter’s insurance is not that expensive, it’s still a good idea to compare prices.  Ask friends and family who their insurance agents are, then contact several of them for the best rates and coverage for you.

Offer to split the costs of insurance with your roommate.  Check into a single policy to cover all inhabitants and possessions in the apartment.

Weigh replacement cost versus actual value.  Replacement cost coverage is more expensive, but will reimburse you for the complete current cost of buying new items.  Actual value insurance will pay your purchase price less depreciation.

Select a deductible that works for you.  A higher deductible (your out-of-pocket expense) means a lower premium. But first, balance your ability to cover the deductible with your monthly premium savings.

Basic renter’s insurance usually includes liability coverage should someone be injured in your apartment.  As with car insurance, there is a per-incident limit on this coverage, so keep that in mind when comparing policies.

The bottom line is that whether you’re renting for a short or long-term, renter’s insurance is a simple, cost-effective way to prevent an unfortunate situation from becoming a tragedy.

Comments

[Dawn]

Does the owner of the property have to be listed on the policy when getting renter's insurance. The owner of the house I am renting is telling me he has to be listed on my renter's insurance policy.

[FMF]

I'm not sure -- it's been so long since I've rented I can't remember. Anyone else know?

I'd simply ask my insurance agent if this is common practice and act accordingly.