Renters Insurance Protects Your Belongings

You rent an apartment or some other form of property. You haven't worried about insurance because the landlord insures the building. It's likely your landlord does have insurance, but it's to protect his property. You need renters insurance to protect your belongings.

Renters insurance doesn't insure the building you live in. Instead, renters insurance covers the contents of your apartment or rental property. Most rental insurance covers your property in the event of theft, fire, vandalism, smoke damage, water damage, electrical damage and more.

 

Damage caused by floods, earthquakes or hurricanes aren't usually covered by basic renters insurance: if you live in a location where these events occur, you can take out a separate policy to provide coverage.

Basic renters insurance usually includes liability insurance. Liability insurance covers you in the event an accident in your apartment leads to legal proceedings. If a friend slips on your apartment stairs and sues you for injuries, your liability insurance helps cover legal or medical costs, minus the insurance deductible (you might want to consider finding a new friend too!).

 

Basic renters insurance doesn't provide large amounts of liability insurance: the liability insurance may only cover $20,000 to $25,000. If you feel you need additional liability insurance (maybe you have really clumsy, or litigious, friends) you can add extra liability insurance onto your policy.

If your apartment or residence becomes temporarily unlivable, renters insurance can cover the cost of alternative living space until you can move back in. This coverage may apply if the apartment suffers fire, water, or other damage.

 

Renters insurance policies usually place restrictions on the length of time they will provide alternative lodgings and how much the temporary residence can cost.

Your renters insurance policy will specify if property claims are made at actual cash value, or replacement costs. Actual cash value pays out what the damaged property is worth: that leather chair you bought has gone down in value since the cat clawed it. Replacement value, while it makes your monthly renters insurance premiums more expensive, covers what it will cost to replace your property, not what your property is worth (there can be a significant difference).

Renters insurance costs depend on a number of factors. Do you rent an apartment or a house? Are you downtown or in the suburbs? Pets may drive the price of renters insurance up. Some insurance companies offer discounts for burglar alarms or smoke detectors. You may also qualify for a discount if you use the same insurance company to buy renters insurance and auto insurance.

Before you purchase renters insurance, take an inventory of your property. Most people underestimate how much property they own, and how much renters insurance they need. If you've got a camera or a camcorder, cruise the apartment taking pictures of everything. Open all the cupboards and closets and record what's in them. That way, you'll have a visual record if you ever need to make an insurance claim.