In today’s world, uncertainty is the certain reality. Expensive, cherished personal possessions are not spared when the unthinkable knocks at the door- in whatever form it chooses. Robbery, fire disaster, willful damage by vagrants, are only a few examples.
A renter’s insurance is appropriate for your protection against loss, as a tenant. The question, however, is- what level of coverage do you require? What exactly is your objective for seeking coverage? Or, will a one-size-fits-all approach adequately reward you at the end of the day?
It becomes necessary, therefore, to determine what your coverage needs are, before purchasing a renter’s insurance. You need to ask key questions regarding: (1) the level of importance you attach to your possessions, (2) what you think they are really worth, (3) your general cash- flow situation, (4) where you live, (5) where you work, (6) your lifestyle.
A good starting point is usually to determine the value of your possessions by taking an inventory. To do this, you simply compile a list of all your possessions. You then indicate, against each item, the current value or price. You may also indicate a projected estimate for their future price. Next, you add up all the figures. The resulting total represents approximately what it would cost you to replace them.
On average, a renter’s insurance policy today will cost you less than $20 a month (less than $300 a year). This gives you coverage to the tune of about $25,000 – $35,000. However, when you ask yourself the questions recommended above, will $30,000 (for instance)represent only a tiny fraction of your belongings? If the answer is yes, then it makes very little sense to seek renter’s insurance coverage at that level. Except, of course, the figure represents adequate coverage for all that really matters to you.
In certain cases, your rented accommodation may be a huge security and health risk. Your renter’s policy must therefore adequately cover not only your possessions, but also the liability concerns where you may be required to ‘foot the bill’ for injuries sustained by others within your section of the premises.
As a tenant, you probably own a few pets. But what are they? Pit-bull terriers? Labradors? In this case, you need to purchase additional (rider) coverage for liability arising from your ownership of such pets.
Other aspects of your lifestyle may, for instance, entail entertainment of guests at your residence. This necessitates your procurement of extra coverage- for possible legal or medical liabilities, considering the increased risk of injury to guests.
Your residence may be in a location where your insurer won’t pay beyond a fixed amount for certain personal belongings (typically, electronic items). You thus need to purchase additional cover for those.
If you work from home, you require extra coverage for liability in relation to your job, equipment,etc.
Are you an avid collector of antiquities or artworks? Perhaps you own lots of jewelery, or a gun; maybe you keep lots of physical cash indoors. These definitely require that you purchase supplementary coverage along with your renter’s insurance.