Broker Check

December 30, 2015 - Get the Most from Renters Insurance

December 30, 2015

Did you know that most renters don’t have renters insurance? While 95% of homeowners carry homeowner’s insurance, a 2014 poll found that just 37% of renters own renters policies.1 Many renters wrongly assume that their landlord’s insurance policy will cover their belongings. Unfortunately, landlord policies typically only cover damage to the structure or liability – not personal property inside. Renters insurance is a cost-effective way to protect yourself and your personal property from disasters like fire, smoke damage, theft, and water damage. Here are four things you should consider when purchasing renters insurance:

  1. Understand the difference between replacement cost and cash value
    Most rental policies will either offer you Actual Cash Value (ACV) – the value of an item minus usage and depreciation – or Replacement Value (RV) – the cost of going out and replacing the item today. Typically, RV policies will be more expensive because they will have to pay out more to replace your property in the event of a claim. Policies can vary greatly in price based on factors like location, coverage amount, and your deductible. A qualified insurance expert can help you create the policy that meets your needs.
  2. Don’t forget about liability
    Did you know that you could be liable if a visitor or worker is injured in your rental? Slips, falls, animal bites, burns – there are many ways someone could get hurt in your home, and a claim against you could have serious financial consequences. A rental policy can include liability coverage to help protect you against a lawsuit resulting from an incident in your home.
  3. Do a home inventory
    To make sure that you have enough insurance coverage, don’t try to guess the value of your property. Instead, take the time to create an inventory of all your belongings. It’s very common for people to underestimate the value of their property and a home inventory can help you more accurately estimate replacement costs. Be sure to list all electronics, furniture, clothing, art, jewelry, musical instruments, sports gear, firearms, tools, and any appliances you may own. Note serial numbers and take photos or videos to help you with any future claims. Keep physical and electronic copies of your inventory somewhere safe so that you can access them in the event of an emergency.
  4. Think about the extras
    Standard rental insurance policies may not offer enough coverage to replace the value of expensive art, jewelry, or electronics. Many policies will also cap the coverage on specific items of higher value. If you have items that are worth a lot to you, it might be worth purchasing additional insurance in the form of riders. Another consideration is coverage to pay for hotel bills or temporary lodgings if you’re displaced from your rental due to repairs or damage.