Renters Insurance Explained
Why do you need renter’s insurance?
Many people renting an apartment feel they don’t have that much stuff to replace so why should they bother with insurance?
One reason is that you would be surprised how quickly the price adds up for everything you own.
When you look around your apartment or rental home you need to add up furniture, computers, electronics, TV’s, dishes, silverware, all the kitchen utensils and kitchen stuff, bathroom stuff, clothing, bedding, etc.
Even when you don’t have a lot it still will be a big chunk of change to replace it all at one time if the place burns down. Most renters’ policies you can get a minimum coverage of $20,000 for your personal property.
The policies are usually only $200-$300 per year.
Another huge reason to get a renter’s policy is to have protection for your personal liability. This is what protects you in a lawsuit if someone gets hurt on the property you are renting or you get sued for any other covered issue under the insurance policy.
Many apartment complexes now require you to have this coverage.
While you may feel you don’t currently own anything you need to protect don’t forget that your future earnings can be garnished in a legal settlement.
The insurance company will also cover your legal expenses, this alone is a great reason to have a policy.
When shopping for a policy it may seem like price is the only thing that matters.
Just looking at the quote sheet you receive it seems like all companies are the same, right? Wrong!
All policies and companies are not created equal.
What are the basic coverages that you see on the quote sheet when you are shopping for a policy?
Personal Property – Coverage C on the quote.
This is how much money you get to replace all of your personal contents in the home.
The most important thing is to make sure you have Replacement Cost Coverage.
This means you will get to replace the item lost with a new item at full cost.
If you only have Actual Cash Value then you only get paid for the cost of what it would be to buy a used item.
Be careful, your personal contents add up faster than you think.
Make a video of everything in your home and store it off site.
That way if you have a fire or other disaster you can easily show the claims adjuster what you need to replace.
Loss of Use – Coverage D on the quote.
This is how much the insurance company will pay to house you if you need to leave your house for it to be repaired or rebuilt.
Most companies either provide for up to 12 months or 30% of what the dwelling amount is.
Personal Liability – Coverage E on the quote.
This amount is how much the insurance company will pay to someone who files a claim against you for an incident the say you are responsible for.
For example, someone trips and breaks a hip on your property.
You would be liable for medical costs, lost wages, and pain and suffering.
You want to make sure to have enough coverage so the person will settle and not take you to court.
Medical Payments to Others – Coverage F on the quote.
This is how much will be paid to someone who is hurt on your property to pay for medical expenses if you are not legally liable.
One more layer of protection from someone trying to file a frivolous lawsuit.
This is not coverage for household members.
There are many optional coverages that you can add to your renter’s insurance policy.
Here are a few that I recommend.
1. Water/Sewer backup.
This is not covered on most basic homeowner’s policies.
This would cover if the sewer line backed up into your home.
Usually when it happens it can cost several thousands of dollars in damage to your flooring and walls.
I recommend adding at least the minimum $5,000 coverage to your policy.
Personal Injury – This covers you for libel/slander.
In the past this was more of a concern for public figures.
Today, with all the social media, everyone should add this.
Comments made on Facebook, Twitter, Linked In, etc. may be seen as defamation by the person or company you are commenting on and they can file a lawsuit.
Lawsuits have been on the rise for this issue recently.
Be especially careful with teenagers.
You are liable for family members in your home too.
Scheduled Personal Property
If you have any items that individually are worth $3,000 or more in the categories of jewelry, art, antiques, fur, guns, computers, and collectibles let your agent know.
Most policies have limits for what they will pay out for these categories in the event of a theft.
To schedule the piece, such as a wedding ring set, you would need an appraisal or receipt in the last 3 years.
You pay an additional premium but it insures you will get paid the full value for the item.
You also get the additional protection for “mysterious disappearance”.
So if you lose that piece of jewelry when you are out, you are covered.
If you have smaller pieces but the total of the category is more than what is covered you can also ask to increase the coverage for that category.
Make sure to talk about this with your agent.
Most companies offer coverage to help you in the event of ID theft.
It can either be providing the legal services or covering actual losses up to a certain amount.
Going online and buying a cheap policy seems great now.
When you file a claim and find out you owe thousands, you realize cheaper is not better.
I am here to make sure you get the right policy to protect you and make sure your insurance experience is a happy one.
Sondra Wendt – 623-297-1475
EZ Insurance Solutions