Renter’s insurance is not always a requirement, so it is easy to overlook. However, it is just as necessary as car insurance or homeowner’s insurance. It will give you protection for your personal items as well as offering liability protection and temporary housing. When choosing a renter’s insurance policy, it is important to get the right level of insurance for you.
The first step in determining the level of insurance you will need is to take inventory. It is important to know the total cost of all your possessions so you get the right amount of coverage. If your property is only worth $15,000, there is no need to look at a $30,000 policy. The price of the renter’s insurance policy will increase with the amount coverage needed.
Once you have determined the level of coverage you need for your personal property, you need to decide how much you can pay out of pocket before the insurance policy kicks in. If a $1,000 deductible is manageable, then the policy will cost less than if you can only afford a $500 deductible. A deductible would apply to all coverage types except for liability coverage.
It is also important to understand the type of location you are moving into. If there are many thefts in the area where you will be renting, expect the renter’s insurance to be higher. Also keep in mind if the area is prone to flooding, tornadoes, or hurricanes. These disasters are not included in a basic renter’s insurance policy. You will need to consider purchasing extra insurance to cover your home in case any of these perils occur regularly in that area.
As you are choosing the right level of renter’s insurance, it is important to understand the lingo. When purchasing coverage for your personal property, you will have the option of Replacement Cost insurance or Actual Cash Value insurance. Replacement cost insurance will cover the cost to actually replace your property. This type of insurance will cost a little more, but if you suffer any of the perils, like theft, it will be worth it when replacing costly items like electronics. Actual cash value insurance will only cover the cost of the property at the time of the loss. This will be less expensive, and more appealing if you are not truly worried about replacing the items in your home.
Also take note of safety features in the home. There may be discounts available for safety devices such as smoke alarms, deadbolts, fire extinguishers, and burglar alarms. If the items are not already there, it may be worth the cost to add these items.
There are many factors to consider when choosing the right level of renter’s insurance. It will differ from person to person, so take stock of your personal property and how much liability protection you will need. Don’t forget to think about the rental’s location and any discounts available to you. If you have any questions, always check with your agent to insure you have the right level of protection.