What is Renters Insurance ?

Renters insurance – definition
Renters insurance can be defined as the insurance given to a person who lives in a rented house or apartment. The renter can at any point of time undergo some personal losses and this policy (on the same lines as the homeowner insurance) can help him or her to come out of the problems. If you dwell in a rented house, there is a need to get an insurance that will cover all your personal belongings. Of course, the house that you live in will certainly have an insurance (done by the landlord) but that is only for the premises and does not cover your possessions.

Is it really important to get renters insurance ? If so then how do I choose the one that is best suitable for my needs ?
It is the general trend that you first think of insuring your home or your new vehicle. This is definitely important and is required by the bank that helps you in financing. We tend to attach not much importance to a rented apartment. After all, why bother about the place when it does not belong to you! Do you feel the same? Then think again. What happens if all your personal possessions and items get damaged? A renter’s insurance will protect all these in case of a serious damage. Moreover, it will also provide support in your temporary housing and liability protection like medical expenses for your family. Before deciding on a policy it is advisable to learn about all the options available.

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Choosing the right one Once you have decided on investing in a policy, consider the following points The coverage cost – This is one of the most important factors that need to be considered in the cost and the coverage. Remember that the price is not dependent on each and every item of your property; it is a fixed amount that is decided after taking a look at all the possessions. It is evident that more coverage you would like to have higher will be the cost of the insurance. The deductible – Besides the above discussed coverage cost, you must also consider this factor – the deductible. To put in simple words, this term refers to the amount of money that needs to be paid (by you of course) for all the damages and losses that you have suffered before getting compensated by the company. In general, higher the deductible lower or more economic is the cost of the policy.
Actual cash value or ACV – Once you claim the insurance after incurring a loss, the company compensates for the products based on this factor. If you opt for a standard policy, the company will pay the price or the cost at the time of the loss. This means that the company pays for the present cost of the products or possessions minus the depreciated value. Replacement cost coverage – This is one more important factor that needs to be understood. Policies having replacement cost coverage provide the buyers or customers the amount of money required to replace the damaged (and even lost) property. The money is given only if you replace the items insured; there is also a limit on the amount that will be given and the premiums will also be slightly higher. Area of dwelling and the earlier claims – If you have to rent an apartment in an area that has a history of thefts and consequently large amount of claims from the insurance company, it is likely that the cost of your policy will be much higher. You might think that it is unnecessary to spend such a huge amount as your possessions are probably not worth that much; nevertheless, it is safer to go for one as the value of having liability coverage is very significant in renter’s insurance. However, please consult your agent on specific policies before deciding on one; policies differ from one company to another as well as from one state to another. Under a standard renter’s insurance policy, what all things will be covered ? In general the policies cover the losses incurred to your personal property by the following: • Heavy winds or hail • Fire • Theft or robbery • Lightning • Hooliganism or vandalism • Riots or other communal issues • Smoke • Damage caused by any volcanic eruption Some companies provide additional options that can be availed by paying an extra charge. Some of these options include: • Earthquakes • Floods • Hurricanes • Damage caused by water that is released after the bursting of a water pipe or any home utility equipments • Aircrafts • Vehicles • Riots or other communal issues • Falling objects • Damage caused by snow or ice • Any kind of explosion
Besides all these, companies offer packages or deals that can guard you from the following Protection against any liability – Imagine the harassment if you get sued by someone who either gets hurt or incurs some property damages in your premises; of course all this is unintentional. But what can be done? Opt for a policy that can give you protection from such a nuisance. Medical reimbursement for your guests – You can choose a policy that will pay for the hospital charges for the guests who have been injured in your premises. High living expenses – If you have incurred a loss in your property and have been forced to shift into a much expensive neighborhood, there are packages that can cover the increase (up to a limit of course) and give you the much desired peace of mind.

Baggage loss during a travel – To get compensated for your luggage loss during a travel by the airline company, you can choose a package from the renter’s insurance policy.

Other add-ons – If you want to get additional protection by paying a much higher premium, speak to your agent and talk about the details. Some these add-ons include protection from natural calamities like earthquake and floods and even damaged engagement and wedding gifts!

How do I have to make the payments ?
Like any other policy, you can make the payments either at one shot or on a monthly basis.

I share my house with my friend. Do we both need separate policies ?
This can be clarified by your insurance agent. There are companies that offer policies that can cover multiple people while others require separate policies for each and every person.

How can I avail discounts ?
Good question. I know of some insurance companies that give a handsome discount to people who also have availed their auto insurance. Check with your insurance company if they have some similar deals.

Some tips to make the best possible use of your policy
Make an inventory list – Always keep an inventory of all your personal items so that you will get an exact idea of the loss suffered after any catastrophe. This will help you to decide on the amount of insurance that you will need and will also make the claiming process much simpler. The inventory list must have the details of all the items along with their cost and serial number. Try and keep snaps or video clippings of all the rooms along with the drawers, closets and storage areas; also keep the purchase slips or receipts of all those high end stuff that you have bought in a fireproof place or even your bank locker.

Try and keep a low premium – Renters insurance like any other home owners insurance can be expensive. Try and choose policies that have higher deductibles; however, ensure that the deductible can be afforded by you. Figure out if your insuring company offers discounts for installing protective gadgets like fire extinguishers, fire alarms, smoke detectors and burglar alarms. Also if you are retired or over 55 years, there are companies that offer good discounts or low premiums. Finally, however weird it might sound, but reconsider before bringing in a pet. There are insurers who do not offer policies or charge a very high premium on certain breeds.

Article Contributed By: Sabina Zacharias


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