Quick Guide to Buying Renters Insurance
People who rent homes are often unaware of the need for insurance. Despite being one of the cheapest insurance offerings, renters insurance is often neglected because tenants are either unaware of the option or ignorant of the risks. Many assume that any insurance for damages caused by fire, theft, or natural disaster are covered by the landlord or owner of the property.
On the contrary, the property owner is only responsible for insuring the building, and not the items contained within. Your valuables and personal effects are your responsibility, and can only be insured by obtaining proper renters insurance.
Key Coverage Features
There are many features that renters insurance covers that will help alleviate the financial burden in the event of a disaster. These include but are not limited to :
• Contents Coverage – This type of coverage compensates you for loss of personal property. The amount you are entitled to will either be the cost of a full replacement or the actual cash value of the item, depending on the type of coverage you apply for. Most renters insurance policies will give you a detailed breakdown of what is and isn’t covered by your plan. They should also make clear what sort of events constitute coverage, such as fire or theft.
• Liability – Liability is another coverage commonly thought to be covered by the landlord. However, if someone injures themselves while in your apartment or rented home, the responsibility could be yours. An example of this would be a pet that attacked a visitor, or a piece of equipment that you owned and negligently placed where it could do harm. Some policies will even include the cost of a lawyer should a legal claim be filed against you. Liability limits are usually capped between $100K and $500K.
• Medical Payments – If an individual other than a member of the household is injured on the property you rent, having renters insurance will cover you for their medical bills and expenses. These options are generally quite flexible and can cover up to $50K.
• Loss of Use – Some disasters can result in your property not being livable. Although the landlord will be responsible for the building, the loss of your apartment means you will have to find temporary housing elsewhere. Renters insurance will cover the cost of a hotel until you can find a new place to live.
Other Optional Coverages
In addition to the primary coverage offered by renters insurance, many policy providers also offer coverage for identity theft recovery, jewelry and art pieces, earthquake coverage, and loss due to water back-ups.
Common Costs and Discounts
Many renters insurance policies offer a number of attractive discounts, which include but are not limited to the following :
• Bundled packages – Like most insurance products, bundling your renters insurance with your car insurance can diminish your costs.
• Safety Discount – Having fire preventative measures like sprinklers and additional smoke detectors lowers your risk and your premium. Additonally, a burglar alarm or security system will do the same regarding theft.
• Loyalty or Paid-In-Full Discount – Paying 12 months worth of premiums in advance may earn you a discount, as well as renewing your policy and staying loyal to a company.
On the whole, renters insurance protection is highly inexpensive. The average cost ranges between $10 to $25 each month, depending on your level of coverage. Costs can be further attenuated by opting for a high deductible and low personal property coverage.
