4 Things Every Renter Should Know About Renter’s Insurance

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[ by Jamie Shalvey, GradGuard]

When renting an apartment, have you ever considered how much all of your belongings are worth? If they were damaged or stolen, would you be able to pay to replace them? If not, a renter’s insurance policy could help. For around the cost of a once-a-month pizza delivery, you could protect your personal property.

Renter’s insurance helps protect you from property damage or loss, as well as liability risks. Surprisingly, only about one-third of U.S. renters carry renter’s insurance, according to the Insurance Information Institute. The average annual premium for renter’s insurance is about $185 in the U.S., the institute says.

Choosing an insurance policy can be daunting. As with any insurance coverage, you should speak with your insurer to review what will work best for you, but you also should do some research on your own. What should you look for in a renter’s insurance policy? Here are four common features that should be on your radar.

1. Replacement Cost
Replacement cost refers to the money needed to replace lost items, rather than an insurance company reimbursing you for what the items would have been worth. This is important because the amount that the stolen or damaged articles would be worth often is considerably less than the money needed to buy new ones. For example, the laptop you bought five years ago isn’t worth nearly as much now as it was then. So if you have replacement-cost coverage, you can afford to buy a brand-new replacement laptop.

2. Electronics Coverage
Many renter’s insurance policies place a dollar limit on any item that falls under the “electronics” category, so you have to buy additional protection to make sure pricier items are adequately covered, such as laptops, stereo systems and TVs. If you value your electronics, you should be sure that you’ve got enough coverage.

3. Deductible
Before your insurer pays your claim, you’ll likely be responsible for paying a deductible—an established out-of-pocket sum for repair or replacement of something covered by your policy that’s been stolen, damaged or destroyed.

Typically, renter’s insurance deductibles range from $500 to $2,000. If you go with a low deductible, you’ll recover more money if you need to file a claim. However, keep in mind that the lower your deductible is, the higher your premium—the amount you pay for your insurance—will be.

4. Worldwide Coverage
Worldwide coverage protects your personal property wherever it is, like San Francisco or Singapore. This coverage is available if you buy what’s known as a “personal articles” floater—added coverage for valuable items like jewelry or musical instruments. Renter’s insurance policies usually offer little coverage for such belongings ($1,000 per item, for example), so it may make sense to purchase a floater if you own high-value stuff.

Final Advice
Renter’s insurance is important for anyone renting an apartment, including college students. Be sure to do your research when looking for a renter’s insurance policy, and speak with an insurance agent or insurance company representative when trying to decide which coverage is right for you.

Remember that if you’re putting any of your belongings in a self-storage unit, you should check with your renter’s insurance provider to find out whether those belongings are covered—and for how much. If you don’t think your renter’s insurance does the job, you may want to buy self-storage insurance. This coverage is available from storage facilities and independent providers.

Editor's Note: This article was originally published on June 11, 2013 and has been updated for accuracy and comprehensiveness.

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About the SpareFoot Blog

The SpareFoot Blog offers tips about self-storage, information about storage auctions, advice about home organization, news about SpareFoot and much more.
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