The need for insurance is a common concern for landlords and renters alike. Minimizing losses is what insurance is all about. A few minutes spent identifying your specific needs will help make best use of your insurance dollar while protecting your interests. Landlords generally insure their real property, it is up to you to insure your personal property.
As a renter your greatest need is for general coverage for your possessions and liability coverage should someone be injured on the property you rent. Occasionally a renter may make improvements to a property for their own benefit and buy additional coverage for those specific improvements (ex. ramps or accessibility improvements).
You owe it to yourself to understand the type of coverage you are purchasing. A significant difference exists between replacement and actual cash value policies. Take the extra time to understand this detail in your policy. Actual cash value generally refers to the used value of your possessions, resulting in a less expensive policy. Replacement value policies are more expensive, but they cover the cost of replacing the item lost with one of similar quality. Usually you must actually replace the item lost to receive payment from the insurance company.
Operating a business from the rented property, housing collections of music or art, musical instruments or electronics may dictate special coverage to ensure your interests are protected. Often, specific items are covered, but only up to a set amount so if you have a particularly valuable collection or a significant investment in computer equipment, make sure the limits on your policy reflect your potential loss.
Being a long-term customer or over a specific age could qualify you for discounts on renter’s insurance. Special security features such as alarms or locks may also make you eligible for a discount. This is money which could be used to extend your coverage, more accurately reflecting your risk.
Living in a flood or earthquake prone area is enough reason to make sure your property is covered for those types of loss. Special endorsements or riders address this need. You may also want to look into the availability of flood insurance through the National Flood Insurance Program (www.floodsmart.gov).
Owning a car or having health insurance familiarizes the term deductible. This is the amount of loss you are expected to absorb before reimbursement by the insurance company. Higher deductibles can lead to lower insurance premiums. Your exposure to loss increases with the size of the deductible, so be careful with this cost saving tool.
Seek out an agent who will invest the time with you tailoring the policy to your specific needs. Limits of coverage, endorsements, types of coverage, etc. are all features of the product you are purchasing. Insist that your agent explain them to you, it is your property and you are paying the premium. Knowledge is power, so know your coverage up front, before you have a loss.