So you’ve made the decision to get renter’s insurance: congratulations! Now, how do you know what you need to get covered? The answer will certainly vary depending on your individual situation, but here are some general topics to consider when constructing your renter’s insurance policy.
Tip: When selecting an insurance plan, be aware that what’s specifically covered in your plan is all that you’re covered for. Even if your neighbor or friend has a policy with the same company, that doesn’t mean you’ll necessarily have the same coverage as your acquaintance. In order to get the right coverage, it’s important to know what you need. Above all, ask questions about the things you want covered in order to ensure that your policy will be tailored to your needs.
There are two main components to renter’s insurance: property insurance and liability insurance.
Property insurance covers your personal property in the case of certain destructive events, such as fire, flood, hurricane, or another natural disaster. Be aware, however, that property insurance only covers what your policy specifically describes. Some policies may cover fire or hurricanes, others may not. Make sure your policy is as comprehensive as possible, or at least verify that it covers the events to which your area is most susceptible. Realize that your landlord’s insurance covers the building in which you live, not your possessions, except possibly in cases where it can be proven that the landlord’s negligence caused the damage to your property. Never depend on your landlord’s insurance to cover any of your property. Renter’s insurance is reasonably priced, so if you have any possessions that would be extremely expensive to replace, or if the total value of your possessions is at all significant, seriously consider taking out a policy.
When estimating the value of your property, you need to consider the purchase price of the item and the time since you bought it. You can buy insurance that either will reimburse you for the actual cash value of your items (i.e., the depreciated value since the item was purchased), or the replacement value (what it would cost to buy the item new now). The second type of insurance is, obviously, a bit more expensive. Even if you don’t think your property is worth very much, it’s worth your while to make up a list of what it would cost you to replace everything if you were to lose all your possessions in a fire or other disaster. Your items may be worth more than you think, and getting property insurance could be more necessary than you had anticipated.
Liability insurance protects you against liability for any injury that may occur to individuals while they’re visiting or staying in your apartment. If someone were to fall and break a leg in your apartment, for example, you could end up paying some of those medical bills if a lawsuit were filed and you didn’t have liability insurance. If you’re covered by insurance, however, the insurance will help protect you against paying damages of this type. Liability insurance can be helpful in any situation, but especially for people who may have a lot of visitors to the apartment or may engage in any risky activity in the apartment. Keep in mind, though, that you can be liable for any freak accident that might happen in your apartment, so liability insurance is never a bad idea.
Once you decide how much property insurance and what kind of liability insurance you need, you should obtain estimates from different insurance companies regarding how much the type of insurance you want will cost. If you can verify you’re getting the same coverage from each company, you should be able to take the lowest estimate and rest assured that you’re getting comprehensive and affordable coverage. You’ll have peace of mind knowing that you’re able to replace your items no matter what may happen, and you’ll be able to rest easier in your appropriately insured apartment.