Renters insurance covers your possessions form damage or theft when you live in a rented space, such as an apartment. Despite the fact that it’s easy to get and relatively inexpensive, more than half of renters don’t carry it. Part of the problem is that renters insurance and the need for it is poorly understood. Here are six things you should know about renters insurance.
1. It’s cheap.
Most renters insurance policies cost $20-25 a month, which is most likely less than your cell phone, cable TV or Internet service costs. At that cost, if you have one claim in your lifetime, you are likely saving money.
2. You need it.
Many people mistakenly think that their landlord’s insurance policy will cover their belongings. However, that’s almost never the case. Landlord insurance usually only covers damage to the structure as well as any common areas.
3. What it covers.
Policy terms vary, but most renters insurance policies cover any number of natural and man-made disasters, including fire, weather damage and damage from vandalism. Your policy may also cover damage from burst pipes. Of course, renters insurance, just like homeowners insurance, also covers your stuff in the event it’s stolen. Most renters policies also offer liability coverage.
4. What it pays for.
One thing you definitely need to know about your policy is whether it pays actual cash value or replacement value for your stuff. Actual cash value means the estimated worth of your stuff at the time it was lost, while replacement value means what it would cost to replace it today. Replacement value is definitely better. Renters policies also usually pay for living expenses if you are forced from your rental due to fire or weather damage.
5. What affects your cost.
Though renters insurance is generally cheap, there are some things that can wind up saving you money on premiums. For example, you may get a discount for living in a building with a security system. On the other hand, you may pay more if you own a large dog. You can also raise or lower your cost by the size of your deductible and whether you seek extra liability coverage.
6. Where can you get renters insurance.
Though there are some companies that specialize in renters insurance, most people get it from the same company that provides their car insurance. Most major insurers offer renters insurance.