Renters insurance for tenants is like homeowners insurance for a homeowner. You shouldn’t take possession of the home unless you have it. One of the biggest myths is that renters are going to be covered under their landlord’s insurance policy. This is 100% not true. Your landlord is only insured to cover the structure of your home. You are responsible for all of the personal items inside in case of a fire or theft.
Renters insurance is going to be a lot like your auto insurance. You will be able to select the amount of coverage that you have and they will give you the monthly premium that you will pay. Compared to most types of insurance renters insurance is very cheap. Most will only cost you around $10-$20 per month.
Types of Renters Insurance Policies
There are two main policy types. There is actual cash value and there is Replacement cost. Basically, if your company pays out actual cash value (ACV) you will also receive the value of the items at the time of loss. However, if your company pays out replacement cost they will pay for how much it would cost you to purchase the item again. As you can imagine replacement cost will end up being a higher monthly premium but you will be paid out more in the event of a loss.
Make sure you also check with your insurance company because a lot of them will pay for your living expenses if your home becomes unlivable. That means if you have a fire and it is deemed unsafe for you to stay in the house your insurance company will pay for you to stay somewhere. This amount is usually a percentage of the amount of coverage you have. If you have 50,000 worth of coverage and your insurance company has a 30% limit you will receive up to $15,000. Be aware though that this is only good until your home is rebuilt or you can find a new permanent residence.
It is easy to save each month on the premium amount that you pay. Most agencies will give you a discount if you hold other policies with them. You can also get a discount for having fire detectors, fire extinguishers, burglar alarms, etc.
When it comes down to it, you never want to take the risk that you might lose everything especially for only $10-$20 per month. If you don’t have renters insurance call one today and get yourself set up.
Great article, renters insurance is so easy to overlook and the papers are always filled with a story of a family that lost everything. One thing worth mentioning is that often multi-policy discounts will lower one’s auto by at least the amount of the renter’s, so the insurance is essentially free.