FOR RENT: PROTECTING YOUR BELONGINGS WITH RENTERS
If you're moving to a new apartment, you might not think
renters insurance. After all, it's the landlord's responsibility to fix
the building if it floods. However, personal belongings that might be
damaged or even stolen will not be covered by a landlord or property
management company's insurance policy. Read the tips below to
determine if renters insurance is right for you.
What is renters insurance?
Renters insurance protects
your personal property against damage or loss, and also protects you in
case someone is injured while on your property.
It's always a good idea to
take precautions to protect yourself and your belongings. But, not
everyone needs renters insurance. Dependents, such as college students,
may be partially covered under their parent or guardian's policies. A
common provision provides dependents coverage for up to 10 percent of
the parent's policy. Check with your insurance agent regarding the
specific provisions of your policy.
Why purchase renters
If you live in a rented
apartment, house or condominium, your landlord's insurance doesn't
cover your personal property in the event that it is stolen or damaged
as a result of a fire, theft or other unexpected circumstances. The
premiums for renters insurance average between $15 and $30 per month
depending on the location and size of the rental unit and the
As with any insurance
policy, evaluate the benefit of coverage on an individual basis. Your
landlord's coverage will take care of damage to the building's
structure. However, if you want to protect your personal belongings,
consider buying a renter's insurance policy. In addition to personal
belongings, some policies will also cover living expenses if your
apartment or home is uninhabitable due to damage.
It's also important to
protect yourself from lawsuits alleging negligence. The personal
liability portion of a renters policy will provide you with a legal
defense and pay for damages if a court determines you are negligent
resulting in an injury or property damage to another person.
What are your options?
Most renters insurance
policies provide two basic types of coverage: personal property and
liability. Personal property coverage pays to repair or replace
personal belongings if they are damaged, destroyed, or stolen. This is
the most commonly purchased renters policy.
Liability insurance provides
coverage against a claim or lawsuit resulting from bodily injury or
property damage to others caused by an accident while on the
two major types of
- The Broad Form covers
personal belongings against specific events, such as fire or theft.
This is the most commonly purchased renter's policy. Typical coverage
under this form includes damage from fire, lightning, explosion, smoke,
vandalism, theft and water-related damage from property utilities.
- The Comprehensive Form
provides coverage for a range of events, unless specifically excluded
by the policy. Considering the potential amount of coverage, the
premiums for this policy may be higher. Also think about your location
when choosing your form. If you live in an area prone to violent
storms, such as hurricanes, consider purchasing a comprehensive policy
that specifically addresses storm damage. Unusually expensive items,
such as fine jewelry or an art collection, may require the renter to
purchase additional coverage, called a rider or floater. Your insurance
agent can help you determine if additional coverage is necessary.
What's actual cash value and
One important factor to look
for when shopping for renter's insurance is actual cash value vs.
replacement cost coverage. While it may not affect your short-term
premiums, it may make a large difference in your claim submission.
Actual cash-value coverage
will reimburse the renter for the cost of the personal property at the
time of the claim, minus the deductible. It's important to account for
depreciation when considering this coverage option.
For example, if a stereo
system were stolen from an apartment, five years after the stereo was
purchased, the policyholder would be reimbursed for the current value
of the system. Replacement cost coverage, on the other hand, will
reimburse the full value of the new stereo system, after you purchase
the new system and submit your receipts. While the up-front cost is
greater, you are more likely to receive sufficient compensation to
replace your possessions.
If you have questions or are confused about your insurance
contact our Consumer
at (800) 852-5494, (501) 371-2640, or firstname.lastname@example.org.
Get smart about your insurance needs! More information about
auto, home, life and health insurance options — as well as tips
for choosing the coverage that is right for you and your family —
is located on the NAIC website: www.InsureUonline.org.