What You Should Know About: Insurance If You’re A Renter
Renting an apartment or house? Is it filled with your “stuff?” You need Renters insurance.
What you should know:
- Your landlord’s insurance covers their building and appliances. Only your own Renters policy can reimburse you if your personal possessions inside your rental unit are stolen or damaged, or if some files a claim or suit against you.
- The average cost of Renters insurance in 2015 in the United States was $188 per year – or less than $15 per month - according to the Insurance Information Institute (I.I.I.).
- In 2016, only 41 percent of renters in the U.S. had Renters Insurance.
Easy-to-find, affordable Renters insurance is the coverage you need if:
- Your rented home or apartment is destroyed by fire, or
- If your possessions are damaged by smoke and water from a fire in a neighboring unit, or
- If your possessions are hauled away by thieves, or
- If someone visiting is injured while in your apartment.
Yes, your landlord has insurance, but it will only cover the cost of repairing their house or building.
Renters insurance policies typically cover:
- Your home’s contents from fire or smoke, lightning, vandalism, theft, explosion, windstorm and water damage from plumbing.
- Liability protection if someone slips and falls in your home or is injured by any of your possessions and files a claim or lawsuit against you.
- Additional Living Expenses (ALE) if you need to live elsewhere while repairs are being made to your rental.
- Your personal possessions that are in your car, in a storage facility or with you while you travel.
So, how much coverage do you need? The easiest way to determine the value of all your personal possessions is to create a home inventory or make a detailed list of all your belongings and their estimated value.
A few more things to consider when determining how much coverage you need include:
A floater is a separate policy you can add that provides additional coverage for possessions of higher value, such as jewelry, fine art, golf clubs, high-end bicycles or musical instruments. Most renters policies only have a $1,000 total limit on jewelry that is stolen, for example.
Actual Cash Value or Replacement Coverage
You can insure your possessions in one of two ways – for either the cash value or the replacement value.
- Actual Cash Value takes into account the age and condition of items at the time of damage or loss and may include a deduction for depreciation of the item.
- Replacement Coverage is typically pricier coverage, but it will pay the current price of an item you need to replace. For example, if your five-year-old TV is stolen, Replacement Coverage will pay the current price of a comparable TV rather than the original purchase price five years ago plus depreciation.
Just as with Homeowners and many auto insurance policies, Renters insurance policies include a deductible. The deductible is the amount you agree to pay out-of-pocket before your insurance kicks in. The higher the deductible you choose, the more you can expect to save on your policy’s premium.
Just like a standard Homeowners insurance policy, specific natural disasters like floods, earthquakes and landslides are excluded from most Renters insurance policies.
*Some information provided by Insurance Information Institute