Decisions for Renters Purchasing Rental Insurance Policies

Purchasing rental insurance can be time-consuming and somewhat tedious, especially for those who are unfamiliar with insurance policies in general. There is much to be considered when searching for the appropriate policy to fit an individual’s need. Learning what to look for before beginning can help to reduce the stress.

Price is always the first thought that comes to mind when making any purchase. A person has to factor the monthly premiums of an insurance policy in with the amount of monthly rent in order to make sure it’s affordable. Rental insurance is basically inexpensive. A standard policy will usually cost anywhere from $10-$18 per month. When considering the cost, a person should also consider the coverage included. In order for someone to get the most for their money, it is wise to get at least 3 different quotes from 3 different insurance agents.

Take a room-to-room inventory of all personal belongings. This will create an idea of the amount of coverage needed. Taking pictures of individual items and storing them in a separate place other than the dwelling being insured is also a good idea. The photos may come in handy later as proof of ownership. If there are items of extreme value such as: antiques, jewelry, or collectibles that need to be insured, a rider on the policy will have to be taken out. This will cost more.

The amount of deductible will be another decision the renter will have to make. The lower the deductible one is willing to pay, the higher the insurance premium.

Not only is property damage coverage important, but also is liable damage coverage. Property damage covers only property whether destroyed by damage or theft. Liable damage covers any legal fees or judgments that may be incurred. This is if someone falls in the home and sues.

The biggest decision when purchasing rental insurance is whether the renter wants replacement cost coverage or actual cost value (ACV) coverage. With replacement cost, the insurance company will pay the cost of replacing the item today regardless of the purchase price. If a laptop that cost $400.00 a year ago was stolen, then the insurance company will pay what a laptop would cost today. With the actual cost value, the insurance company will only pay what the item is worth today. If a laptop that cost $400.00 a year ago was stolen, the insurance company would subtract a year of depreciation. They may only pay $200.00. The reimbursement would be for the amount the item would be worth today.

If a renter is living in an area that is known for floods or earthquakes, he or she needs to ask the insurance agent if it is covered. There are times when a rider will need to be added to a policy if it’s not a regularly covered situation.

A standard policy for renters will usually contain personal property coverage, personal liability coverage, improvement coverage, and fire legal liability coverage.