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Renters Insurance

If you rent the property in which you reside, it is essential for you to obtain renters insurance, to protect you from financial loss. In the event that your property within the home may be damaged, a lack of renters insurance may result in you losing some or all of your belongings, with no option other than to pay for replacements yourself. Although landlords are required, by their mortgage contract, to maintain insurance for the buildings within, and accidents that may occur on the property, they are not required to insure items that belong to the tenant. Similarly, if an accident involving a third party occurs on the property, it may fall on the tenant to assume liability, depending on the situation. Therefore, renters insurance often covers both a tenant's belongings and their liability to third parties, should the tenant be found responsible.

Standard renters insurance is, often, inexpensive; however, it does depend on the items you intend to insure. If you are the owner of high-value belongings such as expensive jewelry, artwork, high-end electronics, collectibles or other valuables, these may not be covered under a standard policy; your policy may require a 'rider' or 'schedule' specifically stating that the high-value items are covered. Therefore, you should compile a detailed list of anything you own, which could be deemed as high-value; then go through this list with an experienced agent, who can ensure you receive the relevant quotations for your needs. You should expect to pay more if valuables are to be insured. Similarly, cover for events such as an earthquake or flood may be added to a renters insurance policy; however, this may raise your premium, depending on the likelihood of such events occurring in the area where you are renting. Some policies do include such events, as standard.

The premium you pay is also affected by the deductible you choose. The deductible is the amount you will pay out-of-pocket before the insurance company begins to payout on a claim. The higher the deductible, the lower the premium should be. It is important to think about how much you would be able to afford, should a loss occur, rather than simply raising the deductible to save on premium. Another aspect that will affect your premium is whether you choose a like-for-like replacement policy, or a policy that replaces new-for-old. A policy that covers on a replacement value, or like-for-like basis, will be cheaper, but it is important to remember that should you make a claim for an item, such as a four-year-old HD television, you will only receive its replacement value, and not the value of a brand-new, comparable unit. This can make it difficult to obtain a similar item to that which has been lost, making new-for-old policies increasingly popular.

Discuss your needs with an experienced insurance agent, to determine the type of renters insurance policy that is right for you. Be sure to explore the varying aspects of the different policies. Think about what you would need, should a claim occur, before proceeding to accept an offer.

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