Whether you’re renting or owning a home or apartment, it’s important to remember that your valuables and possessions are only as secure as your home or apartment are. Even more, if you’re renting your place, you may not be aware of what’s protected and what’s not.
See, your landlord’s insurance only covers but so much. The cost of repairing the building after a storm or a fire, for instance, and typically that’s about it. To protect yourself and your belongings, you’ll need renters insurance. In order to guide you through the process and help you get the best deal possible, we’ve put together a handy checklist:
First things first
Before you actually buy renters insurance, it’s a good idea to take an inventory of your belongings, including furniture, clothing, and electronics. Make a detailed list, take photographs – better yet, take video – and identify each major item’s size, brand name, and model number. If you want to be really safe you could even copy down the serial numbers.
As you’re assessing inventory, document the purchase dates and costs of the items as best as you can. Receipts are great, but estimates are fine too. It might seem like a lot of work, but having this purchase information will give you a good idea of how much coverage you’ll need. And if you do end up needing to file a claim, you’ll be thankful for having done much of the legwork beforehand.
The right amount of coverage
After people have decided to get renters insurance, their first question is often How much insurance do I need? Well, you’ll need enough to replace all of your personal possessions in the event of a covered disaster – like a fire or windstorm – or theft and vandalism. This is where your home inventory comes into play. See, we told you it was worth it!
You’ll have two choices when it comes to recouping the costs of damaged household items, between replacement cost coverage and actual cash value coverage. Actual cash value policies are the cheaper of the two, but they calculate depreciation value from the purchase price. Replacement cost coverage is a bit pricier, but it reimburses the full cost of replacing or repairing a damaged or destroyed item, even if it goes above the policy limits. It’s up to the renter to decide which coverage policy is best for them.
Note that renters insurance doesn’t cover every type of disaster. Only certain types of water damage fall under the coverage umbrella. For instance, an upstairs tenant’s leaky bathtub or burst pipe flooding your apartment is covered, while damage from an actual flood most likely won’t be. The same goes for earthquakes. If you live in an area susceptible to either, you’ll want to look into getting a separate insurance policy.
What about liability protection?
Good question! Liability protection covers you against lawsuits for both property damage and bodily injury caused by either you, family members, or even pets and can be provided by your renters insurance. The costs of defending yourself in court and any potential court awards are paid for up to the limits of your policy. When you sit down to determine liability coverage, confirm it’s sufficient for your needs.
Some renters may feel they need more liability protection than is typically offered. If that sounds like you, personal umbrella liability policies are an option. These policies kick in once the limit of your primary liability coverage of your auto or renters policy is reached. They also provide additional protections, like against slander and libel.
Save money on renters insurance
There are a number of ways for renters to get discounted coverage, particularly if you’re using the same provider you rely on for online car insurance or business insurance. Look for apartments that have features like smoke detectors, security systems, and dead bolt locks. Have your landlord install these in your apartment if you don’t already have them.
A strong credit score is also a big help, as is being 55 or older (though this is a bit less under you control). As we mentioned, bundling renters insurance with your other policies can save you a significant amount of money. It really is comforting to know that your valuables are protected for a low monthly premium by an insurer you trust.
Finally, before we wrap up, remember that renters insurance isn’t all-powerful. It can’t protect your memories, things like photographs and mementos. Purchase a fireproof safe or similar device to keep your most precious valuables safe, no matter what happens.
This article is intended for informational purposes only. It does not replace or modify the information contained in your insurance policy.