Renters Insurance Guide
If you are like most people, the home or apartment you rent is filled with your possessions, from your priceless family photos to your laptop and your $200 linen bedsheets.
Although your landlord probably has an insurance policy, it is meant to protect the building, not your possessions. The good news is that with an affordable renters insurance policy you can protect all your possessions.
What Does Renters Insurance Cover
Ultimately, renters insurance will cover the contents of your home in the event of loss, but it is also designed to protect you against liability claims if someone would get injured in your home. Even though it isn’t a top-of-mind issue, it does happen occasionally and can be covered for not much money.
The good news is that renters insurance is very cheap!
Whether you want to protect your possessions or your liability, you can buy it for as low as $12/month.
What Does Renters Insurance Protect
- Theft and destruction
- Vandalism or malicious mischief
- Riot or civil disturbance
- Non-flood water damage
- Fire, windstorms, lightening, hail, etc
- Windstorm or hail
- Explosions, vehicles, or falling objects
If any of these creates an unlivable situation, renters insurances will cover some or all of your expenses. For example, a fire may force you to leave your home or apartment.
Standard Insurance Policy
A standard renters insurance policy offers four categories of protection.
#1. Personal Property Protection – Standard policy will pay to replace all your possessions in your home in any of the events listed above.
#2. Personal Liability Protection – It covers accidents or injuries that occur within your home
- Example: If your dog harms someone.
#3. Guest Medical Protection – Coverage for medical expenses of guests who get injured in your home.
#4. Additional Living Expenses – Covers any costs incurred while your home is unlivable.
Before renting an apartment or home, ask your landlord if they have home insurance and regularly checks for termites.
Keep in mind that is the coverage you can expect from a standard renters insurance policy. For more specific coverage, there are additional options to choose from – this includes price it costs vs. the price it costs to replace.
Types of Renters Insurance Policies
When disaster occurs due to any number of situations, a renters insurance policy will likely cover it in some form. The amount you receive however, can vary depending on the type of coverage you opt into.
For those wondering if their insurance policy will provide the value or the items lost vs. the replacement value, there are a few types of renters insurance policies to choose from
Each one distinguishes the amount of money you will receive in the event of property loss.
Actual Cash Value v. Replacement Cost
1. Actual Cash Value
If you have this type of coverage, you will be reimbursed for the amount of money your property was worth when damaged or stolen, minus your deductible.
Ex: The smart tv you bought for $900 five years ago is damaged in a fire, the insurance company will only pay what its current value is right now.
Obviously the amount is less than what you paid for the tv, and it will probably cost more to buy another one.
2. Replacement Cost
With this type of coverage, your insurance policy will pay the cost to replace those belonging, minus your deductible. Usually, you have to pay out-of-pocket to replace it, and send a receipt for reimbursement.
Replacement cost coverage will cost you more in premiums, but may be worth it should an unexpected loss occur.
3. Additional Coverage
As with any kind of home insurance, there are additional benefits which you can add to a policy, and usually for a discounted price if you consolidate them with one insurance company.
Ex: renters insurance does not cover floods or earthquakes.
To protect against theft and natural disasters (such as a flood), you can usually bundle them into a single policy.
Where To Buy Renters Insurance
The internet makes it super easy to find and compare different types of renters insurance policies. You may be asked to fill out a short questionnaire, but within 10-mins you can get real quotes that can be bought online.
Buying directly from insurers online also makes it simple to bundle policies together for a discounted rate. This includes flood protection, auto insurance, and even life insurance.