Rent or own. The two options are the primary ways in which
we inhabit property, unless of course you are living with someone gratis. But of
course we would not be able to stay on their couch or in their extra bedroom
unless they rent or own. Bottom-line we must pay the landlord or mortgage
company money to say we are Home Sweet Home.
Though the options are very
different, they are exactly same when it comes to insurance purposes. Whether
you rent or own, having insurance is a must for so many reasons.
This
guide offers information on the importance of renter's insurance and how new
occupants go about obtaining several levels of coverage to protect their
personal belongings in the residence they are renting.
Why Do You Need Renter's Insurance?
It is simple. You need
renter's insurance for the safety of your belongings. Though your landlord must
have the structure of the property they rent insured in the case of a fire,
break-in, property damage, or natural catastrophe, the landlord's coverage in no
way protects your belongings that would inevitably become damaged or stolen if
the aforementioned events took place. Once this is understood, it is easy to
comprehend why tenants would retain coverage to protect their belongings. Though
not every state mandates renter's insurance, that should not stop residents from
retaining it. When a renter chooses not to purchase monthly coverage, they are
setting themselves up for a serious monetary downfall if their belongings become
damaged during a fire, theft, flooding, or any other incident.
The
second, and just as important, reason is renter's insurance also offers
liability coverage in the case that a guest in your dwelling injures themselves
and decides to sue you for damages. Though not often, this can occur and cost
you thousands of dollars in medical bills and compensation if you are uninsured.
How To Get Renter's Insurance and How Much Does it Cost?
Obtaining renter's insurance is as easy as getting
automobile assurance, and in fact most renter's go through their vehicle carrier
to purchase renter's coverage. Premier auto and renter's insurance carriers
include, but are not limited, to Geico, State Farm, Progressive, Allstate,
Nationwide and Esurance. If you do not own a car and have no automobile
insurance, you can still purchase it from the noted carriers or choose to go
with different company, which can be found online by simply searching renter's
insurance.
As far as cost, renter's insurance is quite inexpensive
compared to the monetary value of a household's belongings. Between a tenant's
furniture, clothing and electronics, an average one-bedroom residence can cost
in the thousands and even tens of thousands depending on the lavishness of the
contents. To cover a two-bedroom rental unit, the average cost of renter's
insurance ranges from $20 to $30 a month. Again, when you compare those low
monthly numbers that cover thousands of dollars of contents it is a no brainer,
renter's insurance is the smartest move a tenant can make.
Deductible and Type of Policy
As with automobile insurance, you
too will have a standard deductible for your renter's insurance, which means you
will have to pay the company a minimal fee before the reimburse you for any
content damage. The deductible amount you choose, rather high or low, will
determine the cost of your monthly payments. For example, if you choose a high
deductible, your monthly payments will be less and if you choose a low
deductible, your payments will be more.
There are two types of policies
renters can choose from, the Replacement Cost or Actual Value Cost. The
Replacement Cost policy will pay what it in fact costs to restore the contents
you lost due to damage or theft. Though you will pay more for the premium, you
will receive more back if you ever need to file a claim for loss. Actual Value
Cost only pays for what your possessions were worth at the time of damage or
theft. Hence, you will not be given what you paid in full at the time of
purchase, but receive the depreciated value cost.
Take Inventory and Make the Call
Now that you know the
importance of renter's insurance, you can get the coverage you need for your new
apartment. Before you make a call to any respective carrier, you must take an
inventory of all of your possessions in your residence to assure you will be
compensated fairly. Taking inventory may seem a bit timely and tedious; however
it can save you thousands of dollars if your contents are damaged or stolen. To
take an inventory, all you need to do is make a list of each item, how much it
is worth and the record the serial number of the fixture.
After doing so,
take a photo of the item or video tape it. You should photo or video all
drawers, closets, storage spaces and the garage unit if you have one. Take any
receipts you still have for your contents and keep them in protected place,
ideally a fireproof safe or out of your residence in your car. Now that you have
properly recorded your items, you can make the very important call to an
insurance carrier to request coverage. If fate has it and your possessions
become damaged or stolen, you will realize it was one of the best calls you
could have ever made.