Always question your renters insurance
Always question your renters insurance
10-Second Overview: Renters insurance is just what you need to manage the risks and potential liabilities that come with renting an apartment, house or condo in these volatile economic times. Find out all you need to know about the kind of coverage you can expect from renter’s insurance and also the things to consider while deciding on a rental insurance policy option for you or members of your family.
Renting a new house or apartment is always a big deal. Between budget, size, and proximity considerations, it can take a while to find a rental that’s right for you, and when you do find that dream apartment, it usually marks a new phase or milestone in your life. Renter’s insurance is something you need to protect yourself and your belongings after you’ve made the time, energy and resource investments involved in finding and setting up your new home.
It is especially important to have rental insurance if the property you’ve rented comes fully furnished because you could be faced with steep out of pocket expenses and significant liabilities if any of the furniture are damaged or destroyed while in your care. In fact, fully furnished rentals will probably require rental insurance as a precondition for signing rental agreements. And even when it isn’t a requirement, you should consider getting rental insurance because it provides full or partial coverage of costs that arise in worst case scenarios like if your rental were to suddenly become uninhabitable or if your rental was burgled, ransacked or damaged by intruders.
You want to protect yourself in situations where paying out of pocket could severely deplete you financially and emotionally, and rental insurance helps you do just that. In this guide, SmartCitti’s insurance expert Mark Chappell explains what you should consider before buying or renewing a rental insurance policy.
Did you know that renters insurance policies usually provide the same kind of coverage as homeowner’s insurance policies? You’d be surprised at the scope and depth of coverage that come with having a good rental insurance policy, ranging from personal property protection to liability protection.
Key question: “Will my valuables be covered if there’s a break in?”
Renters insurance covers you if your valuables are lost due to theft or vandalism. It also provides coverage for loss of valuables resulting from explosions, fire and smoke damage, storm damage, and other kinds of water damage. Liability protection against claims arising from bodily injuries or property damage are also included in renters insurance.
However, be aware that not all valuables and liabilities are covered by renter’s insurance, and you will need to consult an insurance expert to understand the scope of coverage for the different policies available.
Renters insurance policies differ fundamentally by whether they provide cash value coverage or replacement cost coverage. Understanding the difference between these two will help you choose the right renters insurance policy for your budget and your lifestyle.
Key question: “Do I need cash value insurance or replacement cost insurance?”
Replacement cost insurance
Replacement cost insurance pays out the original value of your possessions based on what they cost when you purchased them. This means that if your furniture and electronic devices cost you $100,000 to purchase, then you’ll be covered for $100,000. However, keep in mind that the furniture and electronics you lost could be outmoded and the cost of purchasing new and more serviceable models could be higher than $100,000 and you wouldn’t be covered for the extra cost.
Cash value insurance
This level of coverage pays out the total value of your belongings based on their present value after depreciation. Put simply, if your television cost $1000 to buy but is now worth $200 because it has devalued over time, this type of insurance policy would pay out $200 to replace your television, rather than the $1000 it originally cost you to purchase.
Most renters insurance providers have different policies based on these two kinds of coverage. You should evaluate your lifestyle and your needs carefully before making a decision about which renter’s insurance policy to choose. You should also consult an insurance expert to help you understand where the difference between these two levels of coverage matters most.
Dealing with different insurance providers for auto and renters insurance can be costly in the long run. You also miss out on good deals because most insurance companies have special packages for people who sign up for multiple policies with them. In some cases, the insurance company could have a special discount or special insurance offering where renter’s and auto insurance are bundled for ease of management and payment.
Key question: “Can I reduce my insurance expenses by insuring my car(s) and my new rental home with the same company?”
The answer is ‘Yes’! Think about your auto insurance needs while shopping for renters insurance and consider switching your auto insurance to the same provider especially if the auto insurance policy you have is about expiring and you stand to get more benefits at less cost by insuring your car and your rental home with the same company. According to SmartCitti’s insurance expert, insuring your car and your rented home with the same insurance provider could save you a lot of money.
Having renter’s insurance may not be optional for the property you’d like to rent. These days, landlords are likely to require proof of renters insurance before you move in, and the reason is not farfetched. “Renters insurance will be required by your landlord before they even hand over the keys” says SmartCitti’s expert Mark Chappell. “And that’s because the property will likely be a financial investment for them. So, they’re going to make sure you are protecting it from the worst.”
Key question: “Am I required to have rental insurance?”
Make enquires early on while house hunting to find out if renters insurance is required or optional for the house or apartment you want to rent, and be sure to include this cost while making plans. And if you are not required to have renters insurance before you move in, consider that getting a policy could be beneficial in negotiating or renegotiating your rental agreement. Consult an insurance expert to find out more on the benefits of having renter’s insurance.
Sometimes families go through life changes at the same time— kids move out or go to college and parents downsize by renting a smaller apartment or house. Rather than have separate policies for every member of your family, you can get a home insurance bundle that includes rental and home insurance coverage for each member of the family.
Key question: “Can I bundle home and renters insurance for myself and my family?”
The answer is ‘Yes’! If several members of your family are renting residential properties, you could all save money on your insurance premiums by bundling them together under one policy with one home insurance company. The important thing is to think ahead, plan ahead and consult an insurance expert so that you can get the right policy bundle at the right time and at the right price.
Now that you have a better understanding of what kinds of renter’s insurance policies are available to you and how you can minimize the cost of insurance for you and your family, you’re ready to explore renters policy options in your locale.
Interested in what questions you should ask about your auto insurance? Click here for our in-depth 3-part series.