Important considerations for choosing renters insurance

Photo credit: - Igor
Photo credit: – Igor

Insurance is one of those things we really don’t like paying for—after all, we may never have to use it. But, that is the whole point of it. We get it just in case. Some types are required of us, such as car insurance.

When it comes to optional kinds, like renters insurance, most skip it for that very reason. We figure we will probably not need it, and don’t give it a second thought. In most cases, you are probably right, but you just never know what will happen. A good policy can give you peace of mind at the very least, and that is something that is worth spending a bit of money on. If you are thinking about purchasing renters insurance, here are just a few things to keep in mind.

Dispelling Some Myths

There are some common myths that stop people from buying this sort of policy, which can be to their detriment.

The first is the belief that what you own is not worth covering. This is not a conclusion to be reached without some careful evaluation. Most people would be surprised at the value of what they have accumulated over the years, and how much it would cost them to replace things that are damaged or stolen. Take an inventory of your belongings to get an idea of where you stand, and then determine whether insurance would make sense.

When it comes to renters insurance, many tenants wrongly assume their landlord’s policies will cover property damage, but usually this coverage only applies to the building itself and not the contents. So, if a fire, storm, or some other event wrecks your belongings, the owner of the building is under no obligation to reimburse you for this. If a landlord-owned appliance causes any sort of damage to your personal property, again, not his responsibility. The only way you could get any sort of monetary relief is through a personal policy.

A third myth is coverage only applies to personal belongings, and this is not true. It can also offer other types of coverage for incidents for which you can be held responsible, such as an overflowing bathtub damaging the belongings of your downstairs neighbor, or someone tripping and hurting themselves in your apartment, and wanting to sue you.

Last but certainly not least is the idea that renters insurance is expensive, and it isn’t. On average, a policy only costs about 185 dollars a year.

Choosing a Policy

Make sure to get quotes from multiple carriers and compare them carefully to ensure you have the full picture of what is covered in each quote so you can make an accurate assessment. If you’re in a flood-prone area, read over this portion very carefully to have a good understanding of flood coverage.

What is the payment method for claims? Is it full-replacement value, which means you get the amount of money it would cost to buy the item today, or is it actual value, which means you get the amount of money that the item would be worth were you to buy it today in its present condition? Check the reputation of the company; look for reviews that deal with people who have actually had to file claims to see how they were handled. If there is never any need for the insurance, every company is great.

When it comes to deductibles, be smart about it. The higher the out-of-pocket cost, the lower premiums will be, so it can be tempting to pick higher ones to reduce your insurance  bill. But, keep in mind if you ever actually need to use the coverage, you will be responsible for paying out this amount before you see one dime from the carrier. Is it an amount of money you can truly afford? Is it an amount you would want to spend? If the answers are no, go for the lower deductible and shell out the extra cash now.

Again, optional insurance policies may not be top priority financially speaking, but should ou need them, they are really good to have. So, start shopping for a good renters insurance policy today.


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