Buying renters insurance is more urgent than you might assume. Think your apartment’s landlord is responsible if the stuff in your apartment gets stolen or damaged? Think again. Their responsibility is only for the building itself, which you won’t matter much to you if your new laptop or flat screen TV gets stolen or trashed.
While most of us have drifted by in an apartment for awhile without buying renters insurance, it’s taking a big risk, and it simply doesn’t make any sense considering that a lot of renters insurance policies cost less per day than the price of a soda. Here are a few tips on buying renters insurance.
1. Find a Reputable Insurance Company
You might ask for suggestions at your leasing office. Some management companies have made deals with companies to pre-approve all of their renters. If they haven’t done so, you might suggest they look into it. You can try one of the big insurance names, but you might also consider a company that helps you compare insurance quotes, or choose an insurance plan that has been developed specifically for apartment dwellers, like eRenterPlan.
2. Tally Up What You Need to Insure
Take a stroll around your apartment and make a spreadsheet of what you want or need to insure. Even better, get out your camera and take either still or video shots of some of your belongings. If anything should happen, this will come in very handy. On your spreadsheet, make the columns:
- date bought
- price paid
- current worth
- new cost today
Take your best guess and total the value of everything. This should give you a general idea of how much coverage you need when buying renters insurance.
Depending on the policy that you choose when buying renters insurance, the insurance company will either pay the original value of the item minus the cost of depreciation or pay you what it will cost for you to buy it again new (called “replacement cost”). Naturally, an insurance policy that pays the depreciated value will probably cost less. However, replacement cost policies make it much easier to recover from a claim or catastrophe; you can simply stroll into a store and get new items to replace what you lost.
3. Compare Costs
Get a few quotes and compare the straight yearly cost of that insurance coverage. For example, a renters insurance policy covering up to $10,000 might be between $160-$250 per year. If one company’s quote is significantly higher or lower than the rest, try to figure out why before deciding whether it is a good bargain or a bad deal. There might be a good reason for either. If you can’t figure out the legalese, you may want to contact the company and ask them directly why their insurance policy is so much cheaper or more expensive before buying renters insurance.
4. Compare Insurance Coverage
Here’s where you make sure you’re looking at apples and apples. Make sure you understand what each renters insurance policy is covering, and if you don’t, ask. It’s a good way to test how easy to use their Websites are or how knowledgeable and friendly the customer service. Pay particular attention to answering these questions:
- How much does it cover? (10k, 20k, 30k?)
- Does it include liability insurance?
This is where the party guest who trips or the pizza delivery guy getting bit by your dog is covered. This might include damages as well as medical coverage.
- Is the depreciated value or the cost of buying the item new covered?
- Are “additional living expenses” included?
This will help you with the extra costs of relocating, finding temporary housing, etc.
- What type of damage does it cover?
Most renters insurance policies won’t cover flooding, but will cover water damage caused by leaks, a neighbor leaving their water running, and so on. Depending on what natural disasters are common to your area, you might want to check and see if certain specific mishaps are covered. For example, if you’re in the North, the weight of snow does sometimes cause roofs to collapse. If that happens to your house or apartment, you want that to be covered, and you should consider that when buying renters insurance.
Once you take into account the quality of the coverage with the price, you should be able to make a good decision when buying renters insurance. We hope you won’t ever need to use it, but if you do, we’re sure you’ll be very glad you bought renters insurance.