Renter’s Insurance
What is it?
Renter’s insurance, also known as an H04 policy, covers the cost of replacing personal property in the event of a fire, water damage, robbery or other unexpected peril. A typical policy also covers the loss of property when it occurs away from your apartment. In the case of a vehicle break in, for instance, the loss of your favorite CD collection would in most cases be covered by your renter’s insurance policy.
Who needs it?
According to industry statistics only 29 percent of renters have renter’s insurance. People often mistakenly believe they are covered by the landlords policy. Landlords have insurance, but only for their property, not yours. If the water pipes burst in your apartment, the landlord will fix any damage done to the building, but will not cover damage to any of your personal items. Another reason renter’s often opt not to get renter’s insurance is because they buy into the myth that they don’t have anything worth insuring. This is almost always not true. The average person has over $20,000 worth of stuff. Think of the value of the most basic of items such as your clothing and food. If all were a total loss, how much would it cost you to replenish your cabinets and replace your wardrobe? Most people also have valuable items such as electronics, furniture and books.
What you should know.
- The typical apartment renter’s policy costs $150 to $250 a year.
- In most cases you need to buy a separate policy or rider on your renter’s policy for flood and earthquake coverage.
- If you have a policy that pays actual cash value (ACV), in the case of a loss, your coverage will pay only for what your property was worth at the time it was damaged or stolen, not the purchase price or replacement cost.
- If you have a policy that pays replacement cost coverage, on the other hand, you will recieve compensation based on what it actually costs to replace the lost or damaged item.
- If your apartment becomes unlivable due to a fire, busted pipes, or any other reason that is covered by your policy, renters insurance will generally cover at least some portion of your temporary living expenses.
- A floater policy is an additional type of insurance that covers specific items such as jewelry, furs, fine arts, sterling silver flatware, antiques and other collectibles.
Tips for purchasing a policy.
- Volume buying: Check with the management office of your building to find out if they offer a policy. Normally, you pay less for coverage if the same company offers renter’s insurance to all who want it in the building.
- Multiple policies: Check with your car insurance provider to see if they offer multiple policy discounts. In some cases you may be able to save.
- Fire department location: How close are you to the nearest fire station? If you’re five miles or less that could earn you a discount with some insurers.
- To obtain quotes from multiple insurers try www.netquote.com. Here you can submit information about your residence and receive quotes from multiple insurance agencies.
- You may also want to try doing a search at www.monstermoving.com to locate area insurance providers or simply refer to the yellow pages.
