Renters Insurance Is VERY Important!
Common Questions
How Do You Buy Renters Insurance?
 It is very important for those who rent townhomes, condominiums, apartments or single-family detached homes to obtain renters insurance as the only sure way to protect their assets in case of fire, theft or similar mishaps. The best way to protect against losing everything is to be prepared. Apartment and condominium fires occur fairly regularly in many metropolitan areas.
These fires make this issue very timely, but the need for such insurance never changes. Here is a thumbnail sketch of what renters insurance is about and why it is so important.
Who needs renters insurance? You do if you rent and have stereos, cameras, computers, clothing, jewelry, bicycles, televisions or other valuables you can't afford to replace if stolen, damaged or destroyed.
A renter’s policy can protect your investments - but you must be able to choose a policy wisely to be sure that all your possessions are covered, and that you don't purchase too much coverage. This information can help a consumer make a decision about whether or not one may need renter’s insurance.
Your landlord's insurance does NOT cover your personal property which includes your clothes, stereo, furniture, television, bicycle, jewelry, personal computer, artwork and other items against destruction or loss. Renters insurance gives you both property and liability coverage.
Renters insurance will protect you against losses due to fire or smoke, lightning, vandalism, theft, explosion, windstorm, and water damage from plumbing.
Renters insurance also covers you within your policy limits if someone slips and falls in your dwelling or is injured by any of your possessions and then sues. The insurance should cover your responsibility to other people injured at your home or elsewhere, and includes legal defense costs if you are taken to court within the policy limits.
Common Questions:
Q. Does renters insurance cover all my possessions?
A. It depends. Some possessions - jewelry, computers, expensive cameras - are often subject to a per-category theft limit (for example, some policies have a $5,000 limit for computers). When seeking information on renters policies, ask about the various category limits and how they apply to expensive items you own. You may purchase a personal property rider, providing additional coverage for specific items not included in your basic policy.
Q. Is my property covered away from home?
A. Yes, but coverage may be limited. Restrictions in terms and the amount of coverage might apply (from 10 percent of your personal property coverage to full value). Ask your agent for details. Your liability coverage does not change.
Q. Can I purchase a renters policy with my roommates?
A. If you live in a group house or share an apartment and want to purchase renters insurance, be aware that the regulations vary state to state, and policies vary significantly from company to company. Find out what regulations apply in this state. Then, shop around to find an insurance company that can accommodate your situation. Also, find out whether your policy needs to be updated if you get a new roommate or if all your roommates need to be named under the policy. The individuals who rent an apartment together should be named on the policy, rather than the policy being in one person’s name.
Q. What about unmarried couples
A. Some insurance companies now allow unmarried couples who have been living together to obtain coverage. Some policies automatically extend coverage to any future resident of a policyholder's household who fits the definition of domestic partner.
Q. What happens if my rented or borrowed items are stolen?
A. Items that are "in your possession" are covered under a standard renters policy.
Q. What if my insurance company does not respond to a claim?
A. Your state insurance department or local consumer protection office can answer questions on filing claims and also take complaints.
Q. Is my bicycle or car covered by renters insurance?
A. Your bike is protected by a standard renters insurance policy. Motor vehicles are not covered. A separate insurance policy is needed to protect your car, van or motorcycle.
How Do You Buy Renters Insurance?
1. TAKE AN INVENTORY. Before purchasing, make an itemized list of everything you own with price estimates, serial numbers, receipts (if possible), and purchase dates. Your inventory will help ensure that you purchase the right amount of insurance - not too much or too little. Also, an inventory will help make filing a claim easier. Make copies of this inventory and keep it in a safe place outside of your home (at work, in a safety deposit box or friend's house). Take photographs or a video of your property since this can be helpful when filing a claim. To download FREE Home Inventory Software developed by the insurance industry, Click Here.
2. ASK ABOUT:
A. THEFT LIMITS. For example, most renters policies have a $1,000 total limit on jewelry that is stolen, a $3,000 - $10,000 limit for computers and $2,500 - $10,000 for silverware or flatware. Policies vary, so ask questions. Ask for a list of standard coverage limits so you know whether you'll need to buy a personal property riders, which provides additional coverage for some of your items.
B. CASH OR REPLACEMENT VALUE. Your policy can insure possessions one of two ways - for either the cash or the replacement value. Cash value coverage takes into account the age and condition of items at the time of damage or loss. Replacement value pays today's cost of a new item when replaced. For instance, if your five-year-old TV is stolen, a cash value policy will pay part of the original purchase price while a replacement policy will reimburse the current price of a comparable set. Replacement value policies tend to cost more, and there may be other requirements as well.
C. DEDUCTIBLE OPTIONS. Find out about the deductible - your out-of-pocket cost. The lower the deductible, the more the policy will cost you.
3. SEEK DISCOUNTS. Some insurance companies may offer discounts to their auto policyholders interested in buying a renters policy from them. Also, you may be eligible for discounts if your apartment or home has a security system, smoke detectors, or deadbolt locks. Additional discounts may be available depending on your age or whether you are a non-smoker. Policies vary. Examine as many options as possible.
4. SHOP AROUND. Find an insurance agent or insurance company representative with whom you are comfortable. Ask friends or relatives or consult the yellow pages. Call a variety of insurance companies and agents. Ask questions. Keep your inventory handy, so you can find the amount of coverage that is most appropriate for you ($16,000 is usually the smallest amount of coverage you can get).
5. READ YOUR POLICY. An insurance policy is a contract between you and your insurance company. Read the policy carefully. If you have questions or if something is unclear, call your insurance company representative. Don't sign the contract unless you fully understand the company's responsibilities as well as your own. An insurance policy spells out several obligations for both you and the company. For example, the company has a duty to defend the insured renter in court if the renter is sued for a covered loss. On the other hand, you must give the insurer complete, accurate and timely information. |
