Renter’s insurance is a great way to protect possessions after emergencies. However, finding the best renter’s insurance can be intimidating, especially for first-time renters. Take time to research and compare policies to reduce hassles and save money. Keep reading for the best tips for buying renter’s insurance.
What Does Renter’s Insurance Cover?
People shopping for renter’s insurance need to understand what the policy will cover. Homeowner’s insurance covers the physical structure of a home, but renter’s insurance does not. It covers damage or theft of personal property inside the building. Property can include electronics, appliances, furniture, and clothing. Some renter’s insurance will also cover temporary living expenses if the apartment is damaged and unlivable.
Renter’s insurance also includes liability coverage if the renter causes a guest or their property to be injured. Some renter’s insurance policies also cover medical bills for visitors injured at the renter’s home.
Renter’s insurance does not cover the physical structure or damage caused by floods or earthquakes. It also will not cover water or sewer backup. Renters can opt to purchase additional floater coverage for this. The property will not be covered if intentionally ruined, and insurance companies will investigate to make sure insurance claims are valid.
Is Renter’s Insurance Necessary?
If the apartment or condo that someone lives in is affected by a disaster such as a broken pipe, smoke, or burglary, it could leave renters with damaged property or perhaps no belongings. A devastating event like this could force a person to relocate and deplete their savings account. A renter’s policy protects possessions while the policy holder lived in a rental home. It also provides peace of mind should anything happen. Many landlords require their tenants to purchase renter’s insurance.
How Much Insurance is Needed?
The amount of renter’s insurance needed depends on how much personal property a person owns. Calculate the total value of the personal property, which can add up fast. Make a list of all possessions, take photographs, and note the cost of each item. When purchasing new items, always save receipts to show in case anything happens to the property.
Some insurance policies cover the amount it would cost to replace an item with a new one. This is called the replacement cost value, or RCV. Other policies cover the amount that the item would be worth at the time of damage after it has depreciated. This is called the actual cost value, or ACV, and it is usually less expensive than RCV coverage. Be sure to find out which valuation the policy uses.
Free Online Quotes
Compare renter’s insurance quotes online. This will ensure getting the best rates possible. Renter’s insurance rates vary depending on where the policy holder lives and how much coverage they need, but generally, it costs around $13-$15 per month. This is an affordable way to protect possessions.
Mistakes to Avoid
The most common mistakes when purchasing renter’s insurance are not choosing the right amount of insurance, not purchasing extra liability coverage, and not adding coverage like flood insurance for those who live in a high-risk area. Another common mistake is not comparing the prices from different companies.
For peace of mind and a safer budget, if you rent a house, condominium, or apartment, purchase renter’s insurance. People who encounter emergencies are always glad they did.