Signing a rental agreement and moving into a place to call your own is certainly a freeing experience. After all, what’s not to like about being able to decorate your apartment to suit your own tastes? However, between getting the most out of your vaulted ceilings and whites walls, it’s good to remember that your apartment is made up of more than just the building that houses it; you’re apartment is also the furniture, appliances, and treasured possessions that are contained inside. But while the upkeep and maintenance of the brick and mortar that makes up the structure of your apartment is the responsibility of your property manager, all of your personal items are strictly your responsibility. That means that should an accident occur, or should a criminal break in and steal some of your possessions, you won’t be able to rely on the property owner to provide reimbursement.
That’s where renters’ insurance comes into play.
Renters’ insurance is a type of property insurance that provides coverage for a policyholder’s belongings and liability within a rental property. This means that should something happen that results in the loss of your personal possessions, you’ll be covered through your renters’ insurance. Additionally, renters’ insurance is also designed to protect you from lawsuits related to bodily injury or property damage caused by you or your family members, as well as no-fault medical coverage for any visitors who might get injured in your home. Basically, renters’ insurance protects the things that your property owner’s insurance can’t, making it an absolute necessity for apartment renters.
However, despite how valuable it is, only 40% of renters report that they currently have renters’ insurance.
Why is this? Well, it may have something to do with many renters not really understanding renters’ insurance. So, in an effort to help promote this critical aspect of renter safety, we’d like to share our eight favorite tips on getting the right renters’ insurance:
Make sure you have enough insurance to cover the cost of your possessions
Even if you don’t consider yourself wealthy, there’s a good chance that the overall value of everything you own in your apartment is fairly high. Between the furniture, electronic devices, jewelry, clothing, etc., you probably have at least several thousand dollars worth of personal property that will need to be covered should something unexpected happen. Take an hour or two, and make a detailed inventory of everything that you own in your apartment, and try to determine the value of each item. Be as accurate in your estimations as you can! For items you’re not sure about, use the internet to get an idea of how much similar items are worth. This will give you a good idea of how much coverage you should have. Once you have that number, then you’ll be better equipped to shop around for an insurance provider who can meet your needs at a price you can afford.
Make a list, and keep it safe
Inventorying your possessions will help you know how much coverage you’ll need, but it’s usefulness doesn’t end there. That list will also come in handy should you ever need to account for any damaged or destroyed possessions in an insurance claim. You might not realize how difficult it is to remember all of your valuables after a fire has ravaged your apartment, and you’ll need to make sure that you’re thorough when contacting your insurance company about what has been damaged or destroyed. Record your list on a piece of paper (it’s OK to have a digital copy, as well, but remember that computers and even cloud-based files can be damaged or corrupted), and place it someplace where it will be protected from common disasters. The best renters’ insurance claim tips suggest that a fireproof safe is a good place to keep your list of possessions, along with any other important, irreplaceable documents.
Understand what is covered
As with most policies, there are going to be things that are simply not covered by your renters’ insurance. Generally, renters’ insurance will cover the base value of any and all possessions in your apartment. Standard renters’ insurance also include liability insurance (in case you are sued by someone injured in your apartment, or if you or a family member accidentally cause damage to a neighboring property), and may even cover the cost of living expenses in the event that that your apartment is so heavily damaged that you are forced to temporarily (or permanently) relocate. On the other hand, renters’ insurance doesn’t usually cover earthquake- or flood-related damages, animals (such as pets), or loss of valuable digital information (such as work-related data). When setting up a renters’ insurance policy, take the time to speak with a knowledgeable agent, so that you’ll know what will—and what won’t—be covered.
Know the difference between actual cash value and replacement cost coverage
There may not seem like much of a difference between the value of your possessions, and the cost of replacing them. However, there is. Cash value only covers the worth of the items at the time they were damaged; replacing those items (often with new versions) is a bit more expensive. Investing in replacement cost coverage will ensure that you’ll be able to actually replace your items. Of course, replacement cost coverage is likely to cost you more per month, so you may have to figure that additional cost into your decision.
Figure out how to lower your monthly spend
Statistically speaking, renters’ insurance is quite a bit less expensive than homeowners’ insurance. That having been said, if you feel as though you’re paying too much for your coverage, you may wish to do some more shopping. Compare renters’ insurance prices from multiple providers, and factor the value of what they offer into your decision. A better credit score may also help you lock down renters’ insurance best rates. Lastly, some providers may offer discounts for those who carry multiple policies with a single provider. If all else fails, you can always increase your deductible—you won’t be as covered in the event of an emergency, but at least you’ll be paying less every month.
Consider a lump-sum payment
Most people think of insurance payments as being something that are handled on a month-to-month basis—but it doesn’t have to be that way. One of the best buying renters insurance tips to know is that by instead electing to make your entire year’s worth of payments as a single lump sum, you’ll be able to save a percentage of what you would otherwise be paying towards a monthly premium. The difference won’t be anything mind-boggling, probably no more than a few dollars a month. But after a year, those dollars can really add up. Be sure to address this possibility with your insurance provider.
Read your contract carefully
Most renters’ insurance plans share a number of similarities, particularly in regard to what is eligible for coverage. Still, as with any contract, you should take the time to read through the fine print. There may come a time when your renters’ insurance policy is the only thing protecting you, and you’ll need to know that it has your back. If you are having trouble comprehending the wording or legalese jargon associated with the contract, ask an agent to walk you through the terms, step by step. The last thing you want is to be rushed into agreeing to something you don’t understand.
Don’t put it off
You never know when an emergency situation is going to occur. As such, one of the first things that you should do when moving into a new apartment is purchase renters’ insurance. In fact, many property managers now require that prospective renters have renters’ insurance before they’ll finalize any contracts. But even if this isn’t the case in your building, you should still be careful not to procrastinate getting your insurance. You may not enjoy the process of finding the right provider, but you’ll certainly enjoy the peace of mind that comes from knowing that you possessions are protected.
Did we miss anything? Share your own renters’ insurance tips in our comments section!