31 Jan Protect Your Assets With Renters Insurance
Your landlord has insurance, but their coverage doesn’t always extend to you. Renters insurance will protect your assets and your peace of mind.
Many people don’t consider renters insurance a necessity. Shopping for policies can be overwhelming and no one loves the idea of working another bill into their budget. But the payment doesn’t seem like such a burden when you consider the potential costs of replacing stolen valuables or repairing damage caused by an overflowing sink. Follow these tips to make sure you’re covered if the worst happens.
Do Your Research Before You Sign a Lease
The cost of renters insurance varies from neighborhood to neighborhood. To get the most coverage for your money, keep your search area as large as possible. Meet with your insurance agent; explain where you’d like to live and ask for the average cost of renters insurance for different neighborhoods in the area. This is also a great time to ask about multi-policy discounts.
If you don’t have an insurance agent, visit a few apartment communities within your search area. The staff should be able to explain their insurance requirements and recommend agents used by other tenants.
In some cases, a portion of rental insurance costs are tax deductible. Click here to see if you qualify.
Renters Insurance: Liability vs Contents
When landlords require renters insurance, they’re most concerned with liability policies, which cover:
- Damage you cause to the building or grounds.
- Damage you cause to your neighbors’ personal property.
- Injuries sustained by guests inside your apartment.
Liability insurance will save you legal and financial headaches when accidents happen.
Liability insurance covers damage to other people’s property. To protect your property, you’ll need contents insurance. Cash value policies reimburse the purchase price of items that are damaged or stolen. Replacement value policies reimburse the depreciated value. Items like televisions, computers, and most furniture are fully depreciated within five years, so opt for a cash value policy if your budget allows.
No matter what type of policy you choose, you’ll have to select a coverage amount and a deductible. Your lease will likely list minimum requirements for liability policies. The value of your property will determine the amount of contents insurance you need. Items like jewelry and artwork may require a custom policy rider if their value exceeds policy limits.
A deductible is the out of pocket costs you have to pay before your insurance benefits take over. Policies with high deductibles have the most affordable payments but the greatest financial burden if you file a claim, and vice versa. Ideally, your deductible should be an amount you can realistically keep in savings in case of an emergency.
Supplemental Renters Insurance
Depending on where you live, you may need supplemental insurance to make sure you’re completely covered in the event of certain disasters. If your building is in a flood zone, your regular renters insurance may not cover flood damage. The same can be said for areas prone to storms or wildfires, as well as ground floor and basement units more at risk for plumbing problems. Supplemental flood, fire, and pipe and drain policies will maximize your protection and minimize your out of pocket expenses if you have to file a claim.
You’ve signed your lease and bought your renters insurance. What’s next? Read through our not so average move-in checklist for ideas on how to settle in to your new neighborhood.