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Renters Insurance - Are You One
of the 52,000,000 Without It?

Destruction By Fire PictureIt is heartbreaking to see an individual or worse, an entire family, on a news clip standing outside their rented apartment watching all their worldly goods go up in smoke. Then to find out they didn't have insurance and all they have is just the clothes on their back. As careful as they might have been, they aren't protected from the careless neighbor that left a candle burning unattended, or fell asleep with supper cooking on the stove, or decided to grill on their wooden deck but some coals dropped down and started a raging fire. 

Let's face it, the idea of losing everything - starting over with absolutely nothing isn't something you or I ever want to face. But if you are a renter and don't have this type of insurance, you stand a chance of this worst nightmare happening to you.

Look, over 81,000,000 Americans rent in the U.S. and approximately 64 percent do not have insurance against loss. In others words, 64 percent of renters have never asked themselves...

"What's the worst thing that could happen to my personal property in the place I rent and am I willing to accept the risk?"

By the way, I am not an insurance agent! If you are expecting a sales pitch - trying to get you to buy  from an insurance company I represent, you won't find it here.This is about sharing with you the knowledge I gained when I went shopping for this insurance.

What Insurance For Renters Will Do For You

In case of theft or many types of damage, it will cover your personal belongings up to the amount of your policy. It can also provide you with liability protection (in case a visitor gets injured) and even temporary living expenses.

Do You Really Need This Insurance?

That depends. If your personal property consists of a TV, DVD player and some everyday clothes the answer is probably NO.

If you have expensive clothes and/or furniture, jewelry, collectibles, a broad array of electronics or other significant personal property then you should definitely consider it.

Let's say you have personal property of approximately $10,000 in value (the smallest policy many companies consider). Without any coverage, you underwrite your own "insurance policy" by default with no coverage and a $10,000 deductible. Are you ready for that?

What Does Rental Insurance Cover

In general, a standard policy covers losses from:
fire or lightening; theft, vandalism; windstorm or hail; explosion; collapse of building; glass breakage; falling objects; smoke (in some cases); weight of ice, snow or sleet; plus other lesser occuring incidents. 
Another benefit is the renters liability insurance you receive for protection against claims caused by unintentional acts committed by you, your family members and/or pets. $25,000 is a common basic amount but most offer coverage of $50,000 or $100,000 for a small additional charge.

What Is Not Covered

Standard rental insurance policies do not cover damage or loss from some natural disasters such as earthquakes and floods. In fact, most types of water-related losses are not covered by a standard policy. Also, loss of pets such as animals, birds or fish are usually not covered under a standard policy. Carefully review the "Losses Not Insured" section of any insurance you are considering buying.

What Does Renters Insurance Cost

What you pay depends on a number of factors. Things such as policy size ($10,000 - $40,000), the amount of deductible you choose, if you want actual or replacement cost of your possessions in case of loss, where you live (urban, suburban, rural), how disaster-prone your area is, etc.

According to one major insurer, the average annual cost of a policy premium is $195.00

Insurance Policy "Gotchas"

You can reduce (or eliminate) most "gotchas" by simply reading and understanding your policy's coverage. Be aware...

There are specific limits on what you will receive for losses of certain personal property such as cash, coins, jewelry, computer systems, silverware, collectibles and so on. Check what these limits are and get extra coverage if needed.

Most types of water damage are not covered with a standard policy. Understanding what water damage is and isn't covered is important. If this is of concern to you, get flood insurance or check on extra water damage coverage.

Choose a reasonable deductible amount - one you can live with. It's nice to be able to reduce your premium cost by going with a high deductible but make sure you can afford it in case of a loss. The most common deductible amounts are $250 and $500.

You must have some sort of proof for your loss claims. If someone broke into your place and "cleaned you out", insurance companies aren't going to take just your word for what you lost. Good, solid proof of ownership is necessary in order for your insurance company to pay you for your losses.

What You Should Do Next

If you haven't already done so, take some time to do an inventory of your personal property. It will help determine 1) if you need this insurance and, 2), what size policy to get if you do need this protection. $10,000 is usually the minimum with $40,000 the standard maximum.

Don't make a chore out of this. Take a few days, if necessary, to compile your list adding to it as you think of more items.

If the value of your personal property is enough to deserve coverage, you will want to gather proof of ownership for each significant piece of personal property.

Proof of ownership can be established with credit card statements showing purchases, purchase receipts, photographs, a video inventory and/or owners manuals with makes, models, serial numbers, etc filled in. Keep a copy of your proofs offsite.

Insurance For Renters Quotes

Now that you have a list of personal property items and their approximate value, it's time to go shopping. Here are some questions to consider as you shop for the best policy for you.

  • If you have collectibles, what are the coverage limits for your type of collectible items (stamps, baseball cards, figurines, etc.)? 
  • What is the additional cost for replacement coverage highly recommended) versus being paid the actual cash value (the depreciated value) of your damaged or stolen property? 
  • Is your personal property that is stored in a garage or off-site storage unit covered? If so, what are the coverage limits?
  • If you have one or more roommates, is their personal property covered by your policy? 
  • If you run a business out of your rental "home", is business property or loss of business use covered? 
  • If a guest of yours has an item damaged or stolen while staying or visiting you, is the item covered? 
  • What happens to your coverage if you move to another rental unit (what do they require)? Is your personal property covered while moving to another rental unit?
  • If you have a claim, what proof do they require? Is there a limit on the number of claims you can make? Will the premium go up?
  • Does the policy allow for medical payments for people injured in your rental unit or as a result of your actions - on-site or off-site (this is different from liability coverage)?
  • Besides the "standard" coverage, what other coverage options are available and what is the cost of each?

This is not a complete list of questions you will want to get answers for but it covers some key elements that you may not have thought of.

Final Note: Some states have specific requirements for companies offering insurance to residents. You can find a link to your state's insurance dept. at InsureUonline.org


Disclaimer: I have made every reasonable effort to produce an informative and helpful article on Renters Insurance based on my research and experiences. However, I make no representation or warranties of any kind with regard to its completeness, accuracy or suitability for any specific situation or purpose.

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