Need Renter's Insurance? 3 Things To Know

Posted on: 26 March 2019

When you rent a home, you should always carry your own renter's insurance policy. Renter's insurance policies are affordable and are the best way to protect your belongings. When choosing a policy, there are a few technical things you need to know and consider.

#1 Different Types of Coverage

There are two different types of coverage you can purchase for your rental home. You can choose between an actual cash value plan or a replacement value plan.

With an actual cash plan, when an item is damaged, your insurance company will look at the actual value of the item right now. They will look how the value of the item may have depreciated over time. For example, the value of your MacBook that you bought two years ago is going to be less than you paid for it. The value of your MacBook now, now when you purchased it, is what you will be compensated for.

With a replacement value plan, instead of looking at the value of what your item is worth today, taking into consideration wear and tear and depreciation, the insurance company looks at what it would cost to replace the item. Based on the example above, they would give you the money to purchase a similar MacBook right now.

Replacement value plans often cost more than actual cash plans but can be a valuable investment if you have pricey items in your home that you want to be able to easily replace.

#2 Different Deductible Levels

Next, careful consider the amount of deductible you want to pay if you have a claim. Keep in mind the lower your deductible, generally, the larger your premium is. However, you don't want to choose such a high deductible that you can't afford to pay the amount. Choose an amount that you could easily pay or have in savings for your deductible so that way if you ever do have to make a claim, you can afford to pay the necessary deductible.

#3 Additional Benefits

Renter's insurance can do more than help you replace your belongings if they are stolen or damaged. Renter's insurance can provide you with additional levels of protection as well.

For example, most renter' insurance policies offer liability coverage, so if someone is hurt at your apartment, your insurance will cover their medical bills. Some renter's insurance policies also provide you with money for a place to live if for some reason you can't stay in your apartment because of something such as a fire or a flood. When looking at and comparing policies, consider the value of these extra benefits.

For more information, reach out to a renter's and homeowner's insurance agent.