A good renters insurance policy is essential and affordable, but how do you get the best policy? After you review our tips and guidelines below, you should have the information you need to get the best renters insurance policy for your needs.
Renters insurance overview
Renters insurance is a low-cost policy that is designed to protect a renter’s belongings after a loss. Some renters believe that their landlord’s policy will cover them; the reality is the landlord’s insurance just covers the property. Your belongings and personal liability are separate matters that you need to worry about.
A good renters insurance policy covers your belongings if they are damaged in a covered incident or stolen. Also, if a friend is injured in your apartment or rental home, your policy will protect you from personal liability.
Before you buy renters insurance
Before you make a purchase, it’s vital to conduct an inventory of your personal items that you want to protect. Your policy will pay to repair or replace your covered items if they are ruined or lost by water damage, fire, theft, etc. You need to know how much your property is worth, so you know how much coverage to sign up for.
For instance, if you have about $25,000 of personal property, such as your big-screen TV, laptop, desktop, furniture, and clothes, you may want a policy that covers around $25,000. Then, if you decide to save money and buy less, you could be on the hook to replace the rest of your stuff.
There’s no need to write down every spoon, coffee mug, and lamp when you do your inventory. Instead, you can document what you own by taking pictures of your personal property.
Also, keep your receipts when you buy a new couch, big-screen TV, or other expensive items. If you own rare items, such as antique firearms, you should get a professional appraisal done.
Choosing a renters insurance policy
Once you know how much coverage you need, you can go insurance shopping. These policies have the following sections:
- Coverage for your personal property: This part pays for your covered personal items if they are destroyed, damaged, or stolen. Coverage often ranges from $15,000 to $500,000.
- Medical expenses and liability coverage: This covers liability and lawyer costs if you cause damage to another person’s property. Or, if someone breaks their ankle when they slip on your kitchen floor, this policy will pay for their medical bills and other expenses. Coverage usually is $100,000, $300,000, or $500,000.
- Coverage for loss of use and added living expenses: This coverage compensates for staying in a hotel if your apartment or home is unlivable due to a fire, rain damage, etc. Also, the policy will pay you back for living costs you have when you cannot live in your home temporarily. Coverage may range between $3,000 and $5,000.
Now that you know more about how to select a policy, here are some key points to remember:
- Your landlord may mandate that you have insurance before you move in, so check with them to see what the policy is.
- Renters insurance doesn’t cover floods. If you live in a flood zone, you will need special flood insurance.
- Watch the fine print: Say you paid $2,000 for your Dell laptop three years ago, but now the same one costs only $1,000. The most affordable renters policy will only pay $1,000. If you want to cover its replacement value, the cost is higher.
With the above information, you should be able to select a renters insurance policy that suits your needs.