If you rent, rather than own a home, you might not think about insurance. When you carry a mortgage, you are required to carry homeowner’s insurance. Renters insurance, on the other hand, is not required. It’s up to you whether you want it or not.
Should you carry it? We think so. It helps cover you in the event of a loss. Do you need to over-insure yourself, though? It’s probably not necessary. We help you discover the right coverage and type of insurance below.Get today’s insurance rates.
Renters insurance does not cover the home or apartment your rent. Instead, you insure the items inside the home or apartment. Content coverage protects you in the event of theft, fire, flood, or other natural disasters that cause you to lose your belongings.
Deciding how much content coverage you need requires you to take a home inventory. You’ll need to list each belonging and give it a financial value. This will help you determine how much coverage you need. Keep in mind, different insurance policies have different limits. The more detailed you are about your home inventory, the better coverage you’ll get.
For example, coverage on jewelry is often very limited on blanket policies. You may want to spend the few extra dollars per month and pay for a rider on your policy if you have expensive jewelry you want to insure.
Unlike content coverage, liability coverage should be something every renter considers. Some renters forgo content coverage because they have enough of an emergency fund set aside that would cover any potential loss. They could replace their belongings and not miss a beat.
Liability coverage, covers you in the event that a guest gets hurt while visiting your apartment or home. If they need any type of medical attention, the costs can get out of control rather quickly. Not to mention the fact that a lawsuit is always a possibility, no matter how close you are to the injured person.Shop and compare insurance quotes.
It also covers any injuries or disasters that occur as a result of work being done on your home. Even if it was your landlord that ordered the repairs, if the contractor gets hurt on your property, you could be responsible for the damages. The damages could be to your home, the contractor, and even your neighbor’s properties.
Just how much liability coverage do you need? The average renter carries $100,000 in coverage. However, you can carry however much you feel is necessary to protect yourself in the face of disaster.
Optional Renters Insurance Coverage
While no renters insurance is required, some of it is optional, or less important for renters. This coverage includes:
- Medical payment coverage – You can carry extra coverage that protects you in the event that someone that was on your property needs medical attention due to an injury that occurred in your home. This expense is often also covered under liability insurance, but if you want the extra coverage, you could add on a few thousand dollars coverage.
- Loss of use coverage – If you suffered any type of disaster that made your apartment or rented home unlivable, you could use your loss of use coverage. This helps you pay for lodging elsewhere, as well as covers the cost of food and daily living. Many renters carry $10,000 for this type of coverage, but again, it’s optional.
Determining What You Need
So how do you know just how much coverage you need? You have to do a little thinking. As we already stated above, take a physical inventory of all of your belongings. Figure out the current value of everything and document it. Take pictures of everything and gather as many receipts as you can. The last thing you want to if/when you face disaster is to try to remember what you own.
After you determine the value of your belongings, you can determine if you need any special riders. Like we discussed above with the jewelry, not all expensive or luxurious items will be covered under your content coverage. Discuss any expensive items with your agent so that you know what will and will not be covered. Then you can decide if you need additional coverage.
Lastly, you should figure out how much money you have to pay should someone face disaster in your apartment. If you had to pay medical bills or replace their belongings, could you afford it? This will help you decide if liability insurance is necessary and if so, how much you may want.
The last thing you want to do is underestimate the amount of renters insurance you need. While we talk about big numbers here, meaning $100,000 or more in coverage, it will only cost you a very small fraction of that amount to get coverage. If you could spend less than $100 per year and have peace of mind, would you choose it? The choice is yours.Get the right insurance coverage.