More than two-thirds of renters are uninsured for fire, natural disaster and burglary.
Why do so many people take this unnecessary risk? Some may think that their landlord’s insurance will cover any claims, or that only houses are broken into – and not apartments.
But the fact is that more apartments are broken into than houses, and apartments also burn. Worse yet, if a fire starts in one unit it will often affect nearby flats, as well. A careless neighbor could be the cause of your next burnt hallway.
But if you’re still on the fence, you should consider the following:
Your landlord’s insurance won’t cover you — While landlord’s insurance policies cover the building and any unattached property they have stored there, that coverage does not extend to a tenant’s belongings.
If your things are stolen or destroyed by a fire or a storm, you’ll have to replace them yourself. Additionally, you’ll be footing the bill for any temporary living expenses you may rack up if your apartment is uninhabitable for a period of time.
You may think your stuff is worthless, but it’s not — If you look around, you’ll find that you do have things of value. Your computer, tablet, mp3 player, clothing, furniture, a DVD collection, to name a few.
Most people have thousands of dollars of belongings and if a fire rages through their apartment, it’s all gone. And there’s an added bonus with renter’s insurance, in that it comes with liability protection against lawsuits by visitors who are injured when in your flat.
Renter’s insurance is affordable — Depending on the amount of coverage you purchase, premiums can be as low as a few hundred dollars a year, or less than $20 a month. Give us a call and we can take you through the steps of determining how much coverage you may need.
We’ll walk you through it
Understanding most insurance products does take a little time, but it’s always easier with the help of a professional insurance agent. We can walk you through the process of how to decide what type of policy is right for you, such as:
- Explaining the differences between actual cost and replacement cost.
- Helping you decide which deductible is right for your budget.
- Explaining policy add-ons such as floaters to cover valuables above the coverage limits of a standard policy.
You will have to decide on one important part of the coverage: actual or replacement value.
If you have expensive items like electronics that are subject to depreciation, you should consider replacement cost coverage. With this type of policy, you would be reimbursed for the current cost of buying a new equivalent item.
This way, if you spent $2,000 on a computer three years ago, you would receive a check from the insurance company that would enable you to buy a new one.
However, if you had an “actual value” policy, the computer would be valued not at what you paid for it originally or what it would cost to replace it, but at its actual value as a used item. So, a three-year-old computer would be covered for its initial cost minus depreciation.
Of course, replacement cost coverage is more expensive. It’s up to you to decide which type of coverage — actual value or replacement cost — better fits your needs and budget.