Renter’s insurance is necessary for anyone renting a home, whether it is an apartment or a house. Some people fear the cost of an insurance policy will be unmanageable. However, there are factors which will affect the price of renter’s insurance. It is important to understand what those factors are.
There are several factors which will affect the price you pay for renter’s insurance. The types of coverage you buy, the amount of coverage you buy, and the amount of the deductible are going to determine how much you pay for insurance.
The Types of Coverage
Personal Property:
This coverage will determine how much you will receive to replace personal property such as furniture, electronics, and clothing in case of damage or loss. This coverage will include up to 16 perils that could cause damage or loss of property. Look over the policy carefully to understand what is covered by the policy. You may need to look at purchasing additional coverage if you live in area where flooding or earthquakes frequently occur.
Choosing replacement cost over actual cash value may cost a little more, but it is worth it. Replacement cost coverage will pay for the cost of repair or placement if it is actually replaced. The actual cash value would pay for the item less any depreciation.
Loss of Use:
If your home becomes uninhabitable, this coverage will help cover expenses above what you would normally pay for items such as food and shelter.
Personal Liability:
This will protect you by paying for legal liability up to the limits in case there is any bodily injury or property damage incurred at your home.
Medical Payments to Others:
The medical coverage will help pay medical expenses up to the limits to any people who are accidentally injured on your property.
Optional Coverage:
There are certain items which will cost more to replace if something happened to them. Items such as antiques, fine arts, and other similar types of articles are not easily replaced. You may need to consider purchasing additional limits for these items.
You will also want to know the limits on items in the home. For example if a theft occurred, the limit for home computer equipment is only $5,000. Be aware and ask if there is any additional coverage for amounts over the normal amount.
The deductible is the amount of a covered loss you would have to pay. Deductibles will vary from state to state. Some typical amounts of deductibles available are $500, $1,000, or $2,000. So, if something happened to your home, you would be responsible for the first $500 of the covered loss. Then, the insurance would kick in for the rest up to the limits.
If you are able to afford a higher deductible, this would lower your premium. However, it is important to ask how much you are willing to pay out of pocket in order to save on the premium.
As with any type of insurance, the cost will also depend on where you live. Be sure to ask if there are any discounts available.