Renters Insurance Coverage Can Be a Lifesaver

When you move into a residence you don’t own, having renters insurance coverage should be high on your list of priorities.

Given the tough economic times, a number of renters may make the mistake of thinking they’re saving some money by not acquiring renters insurance coverage. In the end, that decision can turn out to be a costly mistake.

It just takes one fire, flood or burglary to change your financial world for ever if you do not have renters insurance.

There are many misconceptions when it comes to renters’ insurance coverage, so let’s take a look at some of them:

• “Renter’s insurance is too costly, and I already have too many bills to pay.” The average renter’s insurance policy costs around $200 a year. Replacing all of your possessions or being liable for an accident on your premises (should a guest be injured) will be much more costly.
• "I don’t have that many valuable possessions; renter’s insurance isn’t worth it to me.” Renter’s insurance policies can cover everything from electronics to clothing to household appliances. Even a minimal number of items could add up to thousands of dollars’ worth of merchandise, which can all be covered in a basic policy.
• “My landlord has insurance, so I will be covered too.” Wherever you are renting, your landlord has insurance for structural damage to the premises, and might even be protected against damage due to tenants. However, this coverage does not extend to your personal property, nor does it provide you with coverage from being liable for damage you could cause to the property inadvertently (a kitchen fire or a plumbing accident).

Consumers who have had homeowners insurance might not realize the differences between the pair of coverages.

The National Association of Insurance Commissioners (NAIC) offers the following tips for former homeowners who are now renting:

1. How much renter’s insurance will I need? The best thing is to talk to your insurance agent regarding the property you want to protect and the property hazards you want to be insured from. Your agent can give you coverage policy specifics related to your state and the type of policy you are seeking. They will answer any important questions you have regarding:

• What hazards are included in your coverage and if you need a separate policy for specific circumstances
• If your insurance plan affects your roommate(s), if any
• How you should determine value for your items
• What some of the insurance terms mean or what they include
• What optional coverage may be an option for you
• How much liability coverage you will have in your plan

2. Can you receive a discount on your renters insurance coverage if your residence has particular safety features, such as a burglar alarm? Many insurers will decrease your premiums if you have fire or burglar alarms, fire extinguishers, sprinkler systems and/or deadbolts on exterior doors. Some insurance companies might also provide discounts if you have more than one policy with them. Make sure to ask about any discount you might be eligible for.

3. Will you be covered in the event of a flood or earthquake? These natural disasters are typically not covered by a renter’s or homeowners’ insurance policy. Ask your agent or company if your policy fully protects you or whether you need to acquire additional coverage.

4. Could owning a pet make my premium higher? Some municipalities make it that owners of select breeds of pets have insurance policies to cover damages and/or injuries resulting from the animal. This liability might be covered under a standard renter’s insurance policy, but some insurers might require the purchase of more coverage. Discuss with your agent or insurer regarding the options and how they might impact your premium costs.

5. Will renter’s insurance only cover me when I’m at home? Many policies do not limit protection to home-based situations. As an example, items you have insured often are covered if they are stolen by an individual who breaks into your car or if they are damaged while not at your residence.

6. Will a personal liability be included? A renter’s insurance policy covers your property and your personal legal responsibility (or liability) for injuries to others and/or their property while they are on your property.

7. Will you receive added living expenses if you have to reside somewhere else while your apartment is being fixed? Should there be damage to the building you are renting and you must relocate elsewhere while the property is being repaired, you will have coverage for additional living expenses incurred for the reconstruction period.

8. How do you speed up your renter’s insurance claim? A home inventory – including photos and proof of ownership – make it easier to file an accurate, detailed insurance claim in case your residence is damaged or destroyed in a disaster. A home inventory can also help determine how much coverage you need from your renter's insurance.