For most neighborhoods, renter’s insurance is one of the best insurance values around. For a few dollars per month, you can insure your possessions for $20,000 to $100,000 or more. This will protect your things from theft, fire, and a host of other potential calamities. If you have never purchased renter’s insurance, it will help to armed with a few things to know before closing the deal.
Understand the difference between replacement cost and actual cash value.
These are insurance terms that spell out whether you will be able to replace all of your things for the cost of new items or not. Actual cash value means that the insurance company will depreciate your possessions before paying your claim. In many cases, you will lose between 25 percent and half of the value of the items. This can make a loss hurt much worse when you go to replace what you have lost. Not all companies will write a policy for replacement cost. This may require you to do a lot of shopping if this option is important to you.
Compare deductibles from policy to policy.
The deductible is the amount of a loss that the insurance company expects you to absorb before a payment is issued. The problem with deductibles is that if your claim is less than your deductible you will be paid zero dollars. If you have several claims, your deductible is applied with every new claim. You will want to keep this number as low as possible when buying renter’s insurance.
Check on premium payment options.
When purchasing renter’s insurance, you may opt to pay the entire amount with a single payment. This is great if your finances will allow it. However, if you must make payments, you need to know your options. Some companies will allow for monthly or quarterly payments. They usually charge between $5 and $10 per payment for this privilege. You may find a company with a slightly higher premium will be cheaper if you have to make payments.
Find out about claim procedures.
The first time that most people learn about claim procedures is when they have to make one. You need to know if you call the agent or a special claims number. You also need to know what type of information that they will expect you to furnish when filing a claim. Some people only want to deal with their agent. This is fine except you need to make sure that your insurer works this way if it is what you want.
Go through your home and make a list of your things and their value.
If you do not know how much your possessions are worth, how can you know how much to insurance to buy? Take the time to do this exercise. Most people are surprised at how much their things are worth. You need to buy enough insurance to cover a total loss to keep from being financially hurt too badly.
Talk to friends about their insurance to shortcut the search process.
Many times your friends and neighbors have already done the research to answer all of these issues. They may be in a position to give you guidance to a specific insurer who offers nearly everything you need in a policy. This can help you shop with confidence for your new renter’s insurance.