Why you should have Renters Insurance

Anyone renting and/or occupying any type of dwelling, house, apartment, military barracks, they do not own or are not buying, needs to have a renters insurance policy. A common misconception is that if you’re renting your landlord’s policy will cover your personal belongings. This is seldom, if ever, the case. The landlord’s policy is going to cover the dwelling in case of loss and has no bearing on the renter. This is also true for individuals living in a military barracks or in a college dorm. You are responsible for your personal belongings. Uncertain whether you need renters insurance? Think about how much it would cost to replace all of your belongings if everything was destroyed. Can you afford to replace everything from your savings account? If not, you need renters insurance.

Renters insurance policies are basically simple to understand and are typically very inexpensive to purchase. You are purchasing insurance based on the cost of your possessions, nothing else. Most companies have policies which can be purchased for less than $200 per year, often as little as $10 or $12 a month. And like auto and other insurance policies can be paid for monthly. Probably the easiest way to pay for a renters policy is through automatic withdrawal from your checking account. If you have purchased your auto and renters policies from the same company, you typically receive a discount for having multiple lines (policies) with the same company. And you can set up one payment which pays for both policies.

What does a renters policy cover? It covers your personal possessions and those of your family members who live at the same location. This includes clothes, dishes, and other items that every person owns and uses. Some renters policies may cover a small amount of computer equipment, jewelry, and even collectibles. Be sure and check with your agent or company to understand exactly what is covered. Generally items like a substantial amount of computer equipment, including, programs can be covered with the purchase of a rider to the policy. Like the basic policy, riders are relatively inexpensive with the price being determined by the cost of the goods or value of the material being covered. Riders are available for computers, jewelry, antiques, collectibles, and most other high cost items that not everyone will have. Typically for a jewelry, antique, collectible, and some other riders you will need to have the items appraised. You will be required to find and pay the appraiser for his/her report.

When purchasing a renters policy be sure and get a policy that covers your possessions with “Total Replacement Cost” or “Full Replacement Cost”. The actual term may vary from one company to another. What this means is that if your possessions are destroyed by a covered cause, or stolen the insurance company pays the total cost of replacing the item(s). This is important, if your policy doesn’t state that, then if you have a claim you will receive a payment for the depreciated amount to replace your belongings. And if you’ve suffered a total loss these costs can mount up rapidly. So before signing on the dotted line make sure of what you’re buying. Don’t wait until you’ve lost everything you own before checking with your agent or company.

The best thing about a renters policy is that it can purchased in an amount to cover the possessions you own, nothing else. The landlord or the company owning the property is responsible for replacing the building. Understand that if you have a friend living with a child in your dwelling that their possessions are not covered by your policy. This is also true of 2 college students sharing a dorm room. Each non-related person will require their own policy. If you’re not certain if you need a policy at your college or military base check with the college administration or military legal office. Chances are you’ll need a policy to cover your belongings.
Keep a current inventory or video recording of your possessions in a safe place. This will come in handy if you should suffer a loss and expedite replacing your possessions. Review your policy at least once a year to make sure you still have the coverage you need. Having a renters policy is like having a security blanket – its there when you need it. You may never suffer a fire, theft, or loss of any kind, but, why take a chance? Get the coverage you need now, its worth the minimal cost!