What is Renter’s Insurance? Do I Need It?

If you are renting a housing unit, like an apartment for instance, you may think that the insurance policy of the owner will cover the possible personal property loss in case a break-in, a flood or a fire were to happen.

In fact, as a renter, you are not protected by this at all.

The landlord’s insurance in general will cover the housing structure and not the belongings of the renter.

For this reason it is very important and even recommended to get a protective insurance policy known as renter’s insurance.

How Can I Get Renter’s Insurance?

It is not expensive to secure this type of insurance at all. However, it is very helpful to have, because in most cases it will not only cover personal belongings but also legal and medical expenses of visitors that might get injured at your apartment. It also has a theft insurance component.

A classic type of renter’s insurance is somewhere between $150 and $300 per year.

Based on the type and amount of coverage you get, it will cover a certain dollar amount worth of property losses and liability claims against you as the renter. However, insurance companies are known to reject those renter’s insurance applications that are based on duplicate coverage from renter’s parents or based on different group housing situations.

So make sure you are not already covered.

Do I Need Renter’s Insurance as a Young Adult?

Young married couples or people having just a few valuable items that must be insured are the ideal candidates when it comes to getting renter’s insurance. In the case of items that are worth more than $5,000, renters are advised by insurance agents to add on some special riders known as additional insurance protection.

Renter’s insurance generally covers all items outside or inside housing spaces, like laptop computers or bicycles. Nonetheless, they can never cover cars.

In that case, you should get automobile insurance.

When you purchase your renter’s insurance make sure you pay attention to the payout policy. Insurance claims can get paid as replacements costs or as actual value in cash. The cash value of stolen or damaged items regularly has lower monthly payments.

However, the payout is based on the product’s original price. For instance, a stereo system purchased 8 years ago does not have the same value today.

Therefore, a cash value is going to pay the original value of the product.

If you have replacement cost renter’s insurance, you can get today’s prices for these items, in case these get damaged. Even if the premiums for policies like this are much higher, if you have several valuable items this type of coverage might be worth it for you.

That is where the theft insurance comes in.

There are more and more renters nowadays that learn that the liability coverage that is offered by renter’s insurance is valuable. Even if landlords are generally responsible for dangerous accidents on their property, the protection the HO-4 offers is limited.

For instance, if visitors slip and fall on a renter’s floor and then decide to sue only their insurance can cover for all the medical expenses. That is where liability insurance comes in.

Do you have renter’s insurance?

I was required to purchase it when I moved into my apartment. Did you have the option not to purchase it?

What is Renter’s Insurance? Do I Need It? is a post from: Young Finances Please check out the site at http://youngfinances.com or connect on Facebook at YoungFinances. Thanks!