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Do I need renters insurance for an apartment?

August 20th, 2013 - 3:27 PM

Renters insurance – do I really need it?

Imagine you just moved into your new apartment. You’ve unpacked all your moving boxes and now you’re just ready to enjoy an evening at home in your new place. But then the fire alarm goes off. You rush down the stairs and out the door, thinking that someone just pulled it by accident. It was no accident. Fortunately, the firefighters were able to put out the fire before it began spreading. None of your things were damaged, but you start thinking…”What if my stuff had been damaged by the fire? How would I replace it all?”

 

Do I need renters insurance for an apartment?

Do I need renters insurance for an apartment?

It is definitely something to think about, especially if you’re renting an apartment. For many considering renters insurance, “What does renters insurance cover?” is one of the first questions asked. It typically covers:

  • Your personal property. Think about how much it would cost to replace things like your computer, TV, furniture, and clothing. It can really add up! Renters insurance is designed to cover property damaged caused by certain kinds of water damage, fire, smoke, windstorms, lightning, explosions, riots, theft, vandalism, aircraft, the weight of snow on the rented property, snowstorms, and electrical surges.

    Does renters insurance cover damage from floods or earthquakes?

    Typically, renters insurance does not cover your personal property in the event of a flood or earthquake. You can learn more about how to get flood insurance from floodsmart.gov. You can buy earthquake insurance in addition to your renters insurance. Premiums and deductibles for earthquake insurance depend on your location (high-risk vs. low-risk area), the value of your house and your house’s age and construction type.
     
  • Liability coverage. Renters insurance is designed to provide you with coverage if someone injures themselves in your house and sues you or has medical bills from the accident. It is also designed to cover you if you cause damage to someone else’s property.
     
  • Temporary living expenses. If a disaster strikes your apartment complex and you can’t live there anymore, where would you go? Renters insurance is designed to pay your temporary living expenses. Just make sure you find out how long your renters insurance will pay for the temporary living expenses.

According to InsuranceQuotes.com’s recent survey, 6 of 10 U.S. adults who rent don’t have renter’s insurance. Why is this? According the survey, it’s because they think their landlord’s insurance covers their personal belongings. In all reality, a landlord’s insurance only covers the structural damage to the apartment building as a result of something like a fire or disaster – not the tenant’s personal property. Nowadays, most landlords require renters insurance in order to rent an apartment.

Common myths about renters insurance

Frequently asked questions about renters insurance

How much does renters insurance cost?

The great news about renters insurance is that it’s affordable. Your price will likely depend on how much personal property coverage and liability coverage you want. Keep in mind that most renters insurance policies have a deductible, meaning that you would pay a certain amount of money before the insurance begins to cover you. According to the Independent Insurance Agents and Brokers of America, INC., the average cost of renters insurance is $12 per month for $30,000 in property coverage and $100,000 in liability coverage. That’s $2.50 per day – talk about cheap!

How much insurance should I have?

That really depends on the value of your belongings. You can use this helpful renters insurance calculator to get a good idea of how much your stuff is worth. Some insurance companies offer extra coverage (called a rider) for high value items like expensive jewelry or collectibles. To insure these types of items, you may need to get them appraised. Once you know how much insurance coverage you want, you can start shopping around for the best rate.

When I first bought renters insurance, I compared policies and found a company that offered me the same coverage as another company, but for less money. It’s an easy process to get renters insurance, too. Just fill out some paperwork, set up your payment, and get protected almost instantly. And with some companies, you may be able to bundle your renters insurance policy with your car insurance and life insurance policies to get a big discount!

Considering doing these things if you’re thinking about getting renters insurance:

  • Inventory your possessions. It’s a great way to keep track of what you own, and if you do have to file a claim, you’ll be able to prioritize what should be replaced first and know the value of each item you own (which is helpful for getting fully reimbursed).
     
  • Look for ways to cut costs on your premium. If there are any special safety precautions (deadbolt locks, smoke detectors, 24-hour surveillance, etc.) in your building, tell your insurance agent about them and see if you can get your premium lowered.
     
  • Decide what type of renters insurance you need. You can choose from Replacement Cost Value (RVC) or Actual Cash Value (ACV).
     
    • RCV means that the renters insurance will replace your lost or damaged possessions with similar items at current market value (like new).
    • ACV means that the renters insurance will replace your lost or damaged possessions with similar items at depreciated market value (what it’s worth at the time of loss or damage).

Actual cash value is typically cheaper than Replacement Cash. Click here to learn more about each type of coverage.

Do I really need renters insurance for my apartment?

It’s never a bad idea to protect yourself (and your belongings) from the craziness and chaos of this world. You never know what could happen, and in my opinion, it’s better to be safe than sorry. If you have questions about renters insurance, contact a local insurance agent where you live. They’ll be able to help you customize a policy and answer specific insurance-related questions.

If you’re moving soon, then you might want to check and see if your renters insurance covers your belongings during the move. Here is a helpful post with questions to ask your insurance agent to figure out if your renters insurance covers moving.

Helpful Resources Related to Apartment Moving

What size truck do I need to move my apartment?
5 cheapest cities to rent an apartment in the U.S.

Tips for elevator moving, moving up stairs, and moving down stairs
How to clean your apartment like a pro
New Apartment Checklist (it’s printable!)

 

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