What to Look For When Shopping for Renters Insurance
July 22, 2009
You don't want surprises, especially when it concerns personal property that matters to you. As a renter, you need to understand key insurance provisions, so the things you value are adequately covered by your renters insurance. Don't assume that your property or potential liability is covered by your landlord's insurance. Your personal possessions and liability for visitors is your responsibility. Take the time to review a few basics, and you will be well prepared to make the best decision to reduce your risk of financial loss.
Inventory
Make a detailed list of your personal belongings -- furnishings, appliances, electronics and other personal possessions. Any valuable collections? Expensive jewelry? Business samples? You can't make the right insurance decisions without a clear fix on the value of your personal property. While you're at it, take photos of unique and valuable items.
Coverage Amounts
Based on your selection, you will have a maximum amount your renters insurance will pay to cover your personal property. For example, an individual with a typical range of furnishings, electronics, appliances, clothing and other personal items might have a $25,000 maximum limit.
High-Value Items
It is critical to understand coverage limits for special categories and individual items. Money, firearms, gold, jewelry and silver are some of the special categories that have overall or per-item limits. For example, an engagement ring may exceed category or item limits. Talk to your insurance company about an endorsement (or rider) to protect your valuables. The additional premium cost will protect the things you value most.
Reimbursement Calculation
Choosing your method of reimbursement is one of the most important decisions you will make. Actual Cash Value (ACV) coverage reimburses you for the value of your property at the time of loss. Your five-year-old sofa may have cost $1,500, but its actual value may be $150 today. Replacement Cost coverage allows you to replace property (of like kind and quality) at current market prices.
Covered Risks
Carefully review the detailed list of events and risks covered by your renters insurance. Basic residential policies cover losses from multiple perils -- from fire, lightning and theft to sudden and accidental plumbing, heating and air-conditioning overflows. A key risk that is excluded and requires a separate policy is flood damage.
Living Expenses
If your home is uninhabitable due to a fire or any other covered event -- make sure your renters insurance covers the additional living expenses that can quickly mount up.
Premium Variables
Your basic renters insurance policy may range from $100 to $300 per year, depending on your location, type of dwelling, reimbursement method and endorsements. Choosing a higher deductible is one way to reduce premiums, but you will absorb more expense in case of loss.
Learn the basics, so you can make the right decisions for protecting your property, financial well-being and peace of mind. Take a few minutes to get a free no obligation renters insurance quote, from Homesite and see just how affordable it can be.
