Understanding Renters Insurance

The number of renters in America continue to rise. For the past several years, almost 40 percent of households are renters. There are myriad reasons why renting is the best decision for many people. While it is easy to think that renting means your landlord or rental company has you covered when things go wrong, that isn’t always the case. Enter: renters insurance. Once you understand what renters insurance provides, you will see why it is a smart money move for all renters to make.

What is Renters Insurance?

Often times, people equate renters insurance with homeowners insurance. Some people assume renters insurance covers the apartment structure so it’s not necessary. While the owner carries insurance on the building, that coverage is usually for the structure itself, not the contents of the building.

Renters insurance covers a renter’s possessions. Think frozen pipes that burst and ruin your couch. Or a burglar who gets away with your new iPhone and computer. Essentially, if the items in your apartment are damaged or stolen, you can claim the loss with renters insurance.

Renters insurance is also important in case someone has an injury in your home. If someone sues and you’re responsible for the injury, you would have to cover their hospital bill and other expenses. With renters insurance, you can file a claim to have those medical costs covered. It may also cover your legal expenses depending on the details in your policy.

Is All Renters Insurance the Same?

Replacement cost value (RCV) policies cover the cost to purchase or repair the same or similar items today. Actual cash value (ACV) policies cover an item based on an adjustment on the original purchase price.

What is the big difference? Depreciation. When using actual cash value, something that cost $500 when you bought it but is worth $250 today, due to depreciation, means the item is covered at the lower price point.

It is important to read the policy coverage closely to see what is and isn’t covered and what the deductible amount is. In RCV and ACV policies, the renter is responsible for the deductible.

How Much is My Stuff Worth?

Do you really know what is in your home? It’s difficult to remember every single item in your home, never mind knowing what everything cost. If you can’t recall this information on a good day, imagine how difficult it would be to recall in an emergency.

One of the best ways to make sure your renters insurance policy accurately covers your belongings is to create a home inventory. An inventory is a list of everything you own and is easily accessible when filing a claim. It may be especially helpful to have big-ticket items appraised separately. Depending on your policy coverage, you may also need to take out a separate rider to cover expensive items, like jewelry.

Does Renters Insurance Do Anything Else?

Sometimes renters insurance does more than cover the replacement cost or the repair price of your items. Some policies can also provide other coverage. For instance, if you are unable to live in your apartment due to a hailstorm or fire, you may be reimbursed for the cost of staying in a hotel. It is important to review your policy before any emergency takes place so you know what will and what won’t be covered.

How Do I Get Renters Insurance?

While you are researching renters insurance options, start with what is covered by your landlord and what isn’t. Once you have that information, you will have a more accurate understanding of the type and amount of coverage you need.

Next, you will want to make sure that you have an idea of the value of your belongings. That is where a home inventory or appraisals will be helpful. Then, you can work a licensed agent from SelectQuote to request a quote.

Your premiums will fluctuate on how much you are willing to pay with your deductible. When you talk to your SelectQuote agent, take a few minutes to outline your needs and find a plan to ensure the coverage you elect meets those needs. Once you’ve have the right coverage, you can breathe easy knowing you’re protected while you rent.

 

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