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Do I Need Rent Insurance?
While renter's do not need to protect their physical dwelling, the insurance of the landlord does not extend to the belongings of the renter. If your building should experience disaster, your landlord is not required to reimburse you for any losses to your personal belongings. Because of this, renter's, whether it be from a property manager, home owner, or even students living in dorms, should strongly consider purchasing renter's insurance.
What does renter's insurance protect
The primary reason for getting a renter's insurance policy is to protect your belongings in the case of disaster to your rental building, such as tornado, fire, hurricane, and more. Another benefit of renter's insurance is that it protects your belongings from accidental damages caused by other tenants. It also protects you from liability lawsuits or medical bills should a guest get injured while in your apartment.
What type of coverage should I get?
While you should always speak to an insurance agent to correctly determine your renter's insurance needs, there are several common things that are covered in most renter's insurance plans:
- Fire
- Lightning
- Theft
- Smoke
- Vandalism
- Windstorm or hail (generally includes tornadoes and hurricanes, but if you live in a hurricane prone area, check to make sure that you do not need additional coverage)
Many times there are additional coverage options that you can include on your policy, including:
- Floods
- Damage from bursting water pipes
- Riots or civil commotion
- Earthquakes
- Aircraft or vehicles
- Freezing of plumbing
- Falling objects
- Jewelry
In addition to these disaster protection options, most renter's insurance policies include the following:
- Liability protection - This protects you against a lawsuit should someone become injured or have their personal property damaged while in your apartment.
- Medical payments - This covers the medical bills, up to a limit, of anyone injured (except your or your room mates) while in your apartment.
- Increased living expenses - This covers your increased living expenses, up to a limit, should you have to live elsewhere due to a loss.
- Lost property while traveling - This cover's your property while traveling and often times while you're moving.
It's important that you review your coverage with your agent and make sure that you are covered for disaster events that your area is prone to such as hurricanes and floods.
How Coverage Works
When you buy a renter's insurance policy, pay attention to the payout types. There are two different ways that a policy can pay you: actual cash value (pays equal to current cost to replace your items minus your depreciated value) or replacement cost (pays the amount it would cost to replace your damaged property). It's generally better to get replacement cost coverage, though this can increase your premiums.
You should also make sure that you know what your deductible is. Typically, the higher the deductible, the lower the cost of your policy. If you can swing the higher deductible in the event that you need the policy, then go with the higher deductible to save on month-to-month costs.
It's also important to find out from your insurance agent if your room mate (if you have one) needs their own separate policy or if you can share a policy.
How Much Does Renter's Insurance Cost
Renter's insurance policies are generally only a few hundred dollars a year. The actual cost of your policy will be determined by the value of your belongings, any additional coverage's you add to the base policy, your deductible amount, and so on. Be sure to ask your insurance company if you receive a discount by paying for a full years coverage in advance instead of month-to-month.
Getting a Renter's Insurance Policy
There are many companies that provide renter's insurance policies including: USAA, AAA, Allstate, Geico, State Farm, Liberty Mutual, and more. Check with your auto insurance company and your bank to see if they provide policies. It's important to shop around and find the policy that best fits your needs and budget.
Disclaimer: This site and its services are for informational purposes only and are not a substitute for professional advice, examination, diagnosis or treatment. See full disclaimer.
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