If you have recently moved into a rental property, you should think about contacting an insurance agent about renter’s insurance. Your lease might cover damages to the actual property due to things like fire and natural disasters, but as far as your personal belongings go, you are responsible.
What is renter’s insurance?
Renters insurance is designed to help tenants of rental properties have coverage on their personal property. This includes liability coverage in case someone is injured on the property, and also damage coverage, in case personal property is either damaged or lost.
While it is a sound decision to take steps to protect your property, renters insurance might not necessarily be in your best interest. If you are a dependent of someone else, like a college student, your parent’s homeowner insurance might cover some of your belongings as well. So if you are a dependent, check with your parent or guardian to see what kind of insurance they have.
Why purchase renter’s insurance?
If you were to look at your lease, you will find provisions that cover what would happen due to damage to the property through no fault of your own. What you won’t find is financial relief due to damage of your own personal belongings. Landlords are only responsible for what you are renting from them, everything else is your responsibility. This is where renter’s insurance can help fill that gap. Premiums can run somewhere between $15 and $30 a month, depending on the amount of coverage you desire, where you live, your loss history and other factors. Some plans even include covering the expenses of having to find somewhere else to live in case your rental becomes uninhabitable for some time.
What are your options?
There are two types of renter’s insurance: personal property and liability. Personal property covers the replacement of your items in case of damage or loss, and liability will cover you if you are sued or someone makes a claim against you because they suffered injury or property damage at your rental.
There are also different policy types:
Broad Form covers your property from specific events, such as fires and natural disasters. This is the most common type of insurance.
Comprehensive Form will cover your property from a range of events, notwithstanding those that the policy specifically doesn’t cover. The premiums for this can be slightly higher because it can cover a larger amount of potential damages.
What’s actual cash value and replacement cost?
When looking for a plan, look at the replacement cost vs. the actual cash value coverage. The premiums might be similar, but the coverage value might not be.
Actual cash value will cover your property minus depreciation, while replacement costs will reimburse you the cost of replacing the property.
When purchasing insurance, make sure you have a complete list of inventory of what you own, so when you have to actually make a claim, you can prove you owned it before the loss.