5 Things to Consider When Buying Renter’s Insurance
- Coverage Amount
- Actual Cash Vs. Replacement Cost
- Save by Bundling
There are definitely some things you should know about renter’s insurance before visiting your agent and deciding on a policy. An informed decision is always your best decision. So we’ll cover some of the top considerations for deciding on what to include in your specific policy in order to make sure you’re getting the best protection at a price you can afford. Read on to learn more about this process and what to look for when making your decision.
In the event of an accident, theft or certain kinds of natural disasters, this type of insurance is meant to cover the cost of replacing your belongings. Therefore, it’s important that you choose a coverage amount that actually meets the value of what you own. It may seem daunting to add up the total of your stuff, but a roundabout number will typically do. Taking time to do an inventory of your items is worth the time invested. Make a list of each thing and how much you paid for it. Now you’ll have a general idea of what to choose when you visit with your agent.
Not everything is covered under renter’s insurance. You’ll need to ask specific questions of your insurance agent to find out what falls under your policy and what doesn’t. Most insurance for renters doesn’t include damage by earthquake or flood. You should be advised to purchase specific insurance for such events if you live in an area prone to them. In addition, if you are found to be at fault for an accident, it’s important you have liability insurance to cover the potential costs of lawsuits.
Actual Cash Vs. Replacement Costs
You have a couple options when choosing how to be reimbursed for your lost possessions. There’s actual cash value versus replacement value. Actual cash value refers to factors in depreciation. Therefore, you’ll receive the current value of your stuff, rather than what you may have paid for it years ago. Usually, this is less. Replacement cost, on the other hand, gives you what you paid for the item.
A deductible is a fee you must pay prior to being reimbursed by insurance. The higher your deductible, the less premium you’ll pay each month and vice versa. Consider how much money you think you can afford to pay at once in the event of a disaster. Also take into account the savings each month for going with a higher deductible. You could save a great deal over time by choosing to pay more on your deductible. You would want to be discipline enough to have a savings set aside in the event of such an emergency, though.
Save by Bundling
Since you’re buying rental insurance anyway, you might want to check with your current agent to determine if a discount is possible. This is often done when you already carry auto insurance through a particular agent or company. If insurance for rental purposes is an option with that provider, you’ll probably get it at a substantially lower rate than if you were to purchase it elsewhere. Therefore, it’s always worth the ask.
Related Resource: 10 Best Cheap Renter’s Insurance Companies 2018
Don’t make the mistake of thinking you can’t afford this insurance. Truthfully, you could be losing a lot more by choosing to go without renter’s insurance.