Renter’s Insurance – It Doesn’t Cost As Much As You Think

Have you been wondering about whether you’ll be protected if your personal property gets damaged, or if someone is injured in your apartment?

Below are frequently asked questions about renter’s insurance and why you should strongly consider purchasing it.

1. Why do I need renter’s insurance? You need renter’s insurance to cover you if any of your furniture, electronics, books, or other belongings get damaged or destroyed. Renter’s insurance also covers you in the event that someone else is injured in your apartment or someone’s personal property is damaged and sues you.

2. Do I need renter’s insurance if my landlord carries it? Yes, you need renter’s insurance even if your landlord has insurance. Although your landlord almost certainly has property and liability insurance, your landlord’s policy doesn’t cover the items that you keep inside your apartment, and it doesn’t protect you if a guest is injured and sues you for liability.

3. What if I don’t own much personal property? Renter’s insurance is still important even if you don’t have much personal property, because of the liability component. Also, chances are your personal property is worth more than you think. If you don’t have much personal property to insure, then you can save money by choosing a lower policy limit.

4. Do I need renter’s insurance if I rent a condominium, cooperative, or house? Yes. Renter’s insurance is important as long as you rent your home. It applies the same whether you rent an apartment, condo, co-op, or house.

5. Will I receive enough money to replace my stuff if it is damaged or destroyed? That depends on whether you select an actual cash value (ACV) or replacement cost coverage policy. ACV coverage pays for the market value of your property at the moment before it was damaged. Replacement cost coverage pays you the full cost of getting a new item to replace the one that was destroyed.

As you would expect, replacement cost coverage is more expensive than ACV, but it’s usually worth it. For example, think about what would happen if your computer, television, or stereo system were destroyed. If you only had ACV coverage, you would probably fall short of what you would need to properly replace these expensive items.

6. Will I be paid expenses for temporary relocation? Renter’s insurance normally covers your living expenses if you must temporarily relocate because of extensive damage to your apartment. This is something that you should confirm, however, with your agent or broker before settling on a policy.

7. What happens to my renter’s insurance policy if I decide to move? If you purchase a renter’s insurance policy and then move to a different apartment, your policy shouldn’t be affected, at least if the move is within the same state. Inform your insurer of your upcoming move and provide your new address to ensure uninterrupted coverage.

Renter’s insurance is a relatively small cost, if you think about what it would cost you to replace everything you own. Keep in mind that having more than one policy with the same insurer can save you money through a “multi-line discount.” If you already have insurance (your car, for example) with a company that you like, ask your agent or broker whether you are able to also secure a renter’s insurance policy.