During the process of renting a new place, renters insurance may or may not be something that you are required to have, but whether it is or not, it is always a good idea. Depending on where you live, you may or not be at risk from things such as natural disasters, or riots, but a there are many other things that a standard renters insurance plan could cover you for those repairs that you don’t plan for:
-fire and lightning
-windstorm or hail
-explosion
-riot or civil commotion
-damage caused by aircraft
-damage caused by vehicles
-smoke
-vandalism or malicious mischief
-theft
-volcanic eruption
-falling objects
-weight of ice, snow or sleet
-accidental discharge or overflow of water, or steam from within a plumbing, heating or air conditioning or automatic fire protective sprinkler device, or from a household appliance
-sudden and accidental tearing apart, cracking, burning or bulging of a steam or hot water heating system, an air conditioning or automatic fire protective device
-freezing of a plumbing, heating, air conditioning or automatic fire protective sprinkler system or a household appliance
-sudden and accidental damage from artificially generated electrical current
There are several major perils that aren’t covered in a standard renters insurance policy, and if you live in an area that is prone to earthquakes, floods or hurricanes, you will more than likely need to buy a separate policy.
Something that is very important to know when you buy a policy is whether the insurance company offers “actual cash value” or “replacement cost coverage.” Actual cash value only pays for what your property is worth at the time that it is damaged or stolen. For example, if you buy a TV for $300 five years ago, it will be worth significantly less now, so you will be paid what it is worth today minus your deductible, despite the fact that you need $300 to replace your TV. Replacement cost coverage will pay what it actually costs to replace the items that were damaged or stolen, and while it will cost you more in the premium, it will also pay you more should something happen to your home or possessions. If you have unusually valuable possessions you should obtain a seperate policy specifically for them as well.
Another good thing about having renters insurance is that if your residence becomes unlivable due to one of the damages listed above, renters insurance will cover “additional living expenses” while the damage is repaired. If someone is injured on the premises, the insurance will cover their costs, as well as covering legal fees and anything they win if they choose to sue you, however it will only pay up to the policies limit.
The price of your premium, like any other kind of insurance, has several mitigating factors that determine the rate, such as where you live, your deductible, the insurance company that you are buying it from, and whether or not you need additional coverage. Having pets could also have an impact on your insurance, as some companies may be a little reluctant to write you a policy if you have a particular breed of dog, however depending on the company there are also many ways you may be able to get a discount. Having protective devices or purchasing auto insurance from the same company can also earn you a discount.