Renter’s Insurance FAQ

Renter’s Insurance Frequently Asked Questions

For most people renter’s insurance is the one of the cheapest insurances you can buy. Most typical renter’s insurance policies are around $10-25/month.

What is renters insurance? – renters insurance policies give you protection against loss or damage of your own property in your rented home, as well as the option of liability coverage for if anybody is injured whilst they are visitors in your home (as well as the people who live there). You should also have the knowledge that if your home was made uninhabitable, for example, if a fire swept through the whole block, some policies will pay for your accommodation and living expenses whilst you are living elsewhere.

Free Quote Click Here For Free Renters Policy Quote From Liberty Mutual.

Can I rent a home without taking out a renters insurance policy? – as far as the law is concerned, it is not obligatory to take out a renters insurance policy, but some situations might require that you do. For example, your landlord may make it one of the stipulations on the lease that you do have your own renters insurance. Check it out with your landlord (or prospective landlord).

But why do I need a renters insurance policy if my landlord is insured? – the insurance which the landlord has will only cover the “bricks and mortar” and structure of the property, and will not include any of your personal belongings which are inside your home – they are your responsibility.

I don’t have much of value. Do I need renters insurance? – this is one of the biggest reasons which renters give for opting out of renters insurance. They don’t think that they have much of value so therefore it is not worth the expense of insuring it, but wait to be amazed and surprised. When you actually sit down and make an inventory, and work out how much it would cost to replace your belongings in one fell swoop – do you think you could manage it? Don’t just think about the big stuff like the TV and the DVD player, what about all of your clothes, shoes, kitchen equipment, CD’s, DVD’s, jewelry, bedding, soft furnishings, washing machine, tumble dryer, jewelry and personal items. You’ll probably find that to replace everything would cost you a pretty penny. There’s also the other side of the coin if you start to think seriously about the liability insurance. What if somebody is injured in your home, incurring medical bills, suffering, loss of income and who knows what else, you might just find that you’re responsible and if you don’t have sufficient renters insurance cover you can be held personally responsible for the debts.

What does my renters insurance policy cover? – rental insurance is pretty standard really, but it can vary between companies so it’s important to check out everything on your individual policy. If you have anything of particular value (antique jewelry from your Grandmother maybe) then you might want to mention it specifically to make doubly sure that it’s covered.  The personal property insurance will cover your belongings in the rental property against theft, fire, vandalism, some water damage etc, then you might want to take out personal liability cover too. This will cover you if, for example, a visitor in your home is injured and requires medical care. Remember too that there will be a pre-determined limit to the amount you can claim on each part of the insurance.

Is there a different type of cover for a different type of home? – yes and no, you see people rent all kinds of different homes, it could be an apartment, condo, duplex, house or even a mobile home. What you need to remember is that your rental insurance cover is to cover your belongings in your home, so although some things might change a bit depending on the type of home you are renting, basically the bricks and mortar bit is down to the landlord anyway, not to you.

Doesn’t the landlords insurance cover my belongings? – this one’s easy – no. The landlord is responsible for the physical aspects of the dwelling, but what’s inside your own home is down to you and your own renters insurance policy.

How much will my renters insurance policy cover? – this is something which is individual to every policy. Every different area of the policy will have limits as well as deductibles. There are general default limits which work on ball park figures, but it’s important for you to work out how much value your insured property has. First of all take an inventory of all of your things, you might be surprised at just how much stuff you’ve got when you start writing it down and adding up how much it all cost. Next, you need to decide on whether you want your renters insurance policy to cover the ACV or Actual Cash Value, or Replacement Value Coverage. If you choose ACV your premiums will be lower because you will only get the value of any damaged or stolen property taking into account depreciation for its age, wear and tear etc.  You also need to think about how much deductibles you are willing to pay. All of these things are individual to your policy and it’s important that you make sure that you have sufficient cover, yet at an affordable price.

Does my renters insurance policy cover for water damage? – you need to check out your individual policy for this one. While most renters insurance policies will cover, say, a water leak which dripped onto your TV and fried the electrics, you will probably not be covered for flood damage, that needs a different policy altogether. Water damage is a pretty common reason for claims on renters insurance, but do check out the specifics of each individual policy.

Should I have Replacement Value Coverage or Actual Cash Value? – again, this is down to the individual. If you choose ACV then, if you do need to make a claim for some of your property you will only get the cash value of it at the time of the incident, so if, for example, your 5 year old television set is the victim of a water leak and blows up, you’ll only get the value of what it was worth at the time, which is not going to be sufficient to replace your TV with a new one is it. However, if you have RVC then you will get the value of a new television set. Having said that, RVC is of course, more expensive than ACV coverage – which can you afford?

Do I need an Umbrella Liability Policy? – that’s a very good question indeed. Many rental insurance policy holders don’t even know what they are or that they exist. An Umbrella Liability Policy is really an extra policy which kind of kicks in when you’re renters insurance policy is at the limit. If for some reason, you were sued for example and you had to pay damages which were higher than the limit on your regular policy, then the Umbrella Liability Policy would take care of it. You’ll need to have a minimum amount of insurance cover before you will be eligible for an Umbrella Liability Policy, but they aren’t usually that much more expensive (because they don’t plan on being used!). You could get say $1 million worth of cover for around $200 or $300 per year. Umbrella Liability Policies aren’t specific to renters insurance, you can get them for auto insurance or if you’re a home owner too.

Free Quote Click Here For Free Renters Policy Quote From Liberty Mutual.

How can I make my policy a bit cheaper? – all insurance companies work on risk assessment, what is the likelihood of something happening which they will have to pay up for, so it stands to reason that if you reduce the risk of something happening, they are very likely to give you a reduction in premiums. Some of the most obvious methods are:

  • Fitting a burglar alarm might make a difference in your insurance premiums, but don’t stop there, you can also fit smoke alarms, smoke detectors, sprinkler systems and secure locks and bolts.
  • Stop smoking. This is the major cause of home fire deaths in the United States and costs insurance companies millions of dollars every year. There are often reduced rates for non smokers so if you do smoke, stop and get cheaper insurance, save money on your cigarettes and get healthier at the same time – treble whammy.
  • Raise your deductible – this means that you have to pay a larger amount from each claim before you get anything from your insurance company, but can also significantly reduce your premiums.
  • Be a good customer – there are ways to deter burglars, after all, they want an easy life and can be put off by burglar alarms and dead locks. It also helps if you don’t leave your valuables in full view by an open window! If you get a good track record with your insurance company, then it stands to reason that each year your premiums might go down a little.

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