Buyers Guide to Renter’s Insurance
If you think your landlord’s insurance covers your personal property, think again. A landlord’s insurance only protects the trailer, house, building or dorm you are living in. Some landlords will even require you to have renter’s insurance and some won’t (be sure to check your lease to see if renter’s insurance is a requirement).
Usually standard renter’s insurance policies will replace personal property if the property’s damaged or lost due to fire, vandalism or theft. In addition, some providers also offer policies to not only protect your personal property, but their liability coverage can also protect you from being sued by a guest or visitor to your home. If someone accidentally slips and falls on the kitchen floor you just moped, they can, if they want, come back later and sue you. Or, if you caused unintended bodily harm to them or their property, they can sue you for that too. Nevertheless, both these types of situations can protect you if your renter’s insurance policy includes liability coverage as well. Some policies with liability may even provide legal defense and medical costs.
Keep Your Premium Low
While you shop for renter’s insurance, keep this in mind: You can get discounts on the policy you choose. Yes, you read correctly. Your eyes aren’t playing tricks on you. The majority of providers will give discounts if your house, apartment or dorm has smoke detectors, burglar alarms and fire extinguishers. You can also get discounts if you take a policy with a higher deductible, purchase a plan from the same company you get auto insurance from, and/or your home is fire resistive. If the house, apartment or dorm you live in is brick, you may also be entitled to a discount. Furthermore, if you live in a mobile home that’s tied down, anchored or bolted to the ground or foundation, then you could also get a discount for this.
Regarding the discount for taking a policy with a higher deductible, this is okay if you’re willing to pay out-of-pocket expenses. In other words, if you take a policy with a $500 deductible, you will have to pay the $500 and the insurance company will pay the remaining amount. Therefore, before you decide to take a higher deductible for this discount, you will need to determine how much out-of-pocket expense you can afford to pay.
Get Organized
Before you speak with any of the providers, the first thing you should do is prepare. Preparation is the key to getting what’s right for you. Begin your preparation with a list of questions. Some good questions to ask follow; however, you can subtract or add questions based on what you want to know. Your may also find yourself with more questions once you receive the provider’s answer, because their answer to a question you ask could lead to a follow-up question.
– Will my rates ever increase? If yes, what would cause them to increase?
– Do you offer discounts, and if so what can I get discounts for?
– If the provider offers liability insurance, ask them if the liability insurance covers legal defense costs and medical costs.
– Do you pay actual cash value or replacement cost coverage?
– If you live with a roommate, ask the provider if they offer separate policies for roommates.
– How long have you been in business?
– Who are some of your current customers? Some providers may keep their customer’s information private, but if they don’t, and they’re willing to release some names, get the names of customers that have been with them for at least five years.
Now, set your list of questions aside and proceed with your next step: a list of all your personal belongings. Not only will this list be needed when you’re studying each provider’s policy, but it will also be a list you should keep. Why should you keep the list? If anything major does happen to your home, you will need this list when you go to file a claim with the insurance company you choose.
Over a year ago, my cousin and his wife and kids lost their home from a fire. The fire burnt their home to the ground, so they did lose everything they owned — including a mini-van they had parked in front of the house. When they went to file their claim with the insurance company, the first thing the company asked for was a list of all the things they had lost. Needlesstosay, my cousin was at a loss for words, because he didn’t have a list. Since he had no list, he and his wife had to sit down and think of everything of value that they had lost. Not only did they have to remember everything they had, but they also had to know approximately how much those things were worth. Yes, this gave them both a migraine, but in order to get the insurance money, they had to do it.
Don’t make the same mistake my cousin did. Prepare your list and place it in a fireproof safe or a bank deposit box. In addition, your list should include all your valuables: furniture, antiques, guns, etc. Next, beside each valuable, list what you think its worth (research on the Internet can help), when you bought it, and how much you paid for it (if you can remember), and finally, list the serial number of each valuable.
Other than your list, a couple more items to have are photos and a video. Take pictures and a video of all the things on your list, and then place the photos and video in the fireproof safe or bank deposit box with your list.
Weighing Your Possibilities
As you’re shopping around and studying each renter’s insurance policy, you should consider some things before you decide which provider is best for you.
1. Approximately, how much will it cost you to replace your personal property? Refer back to the list you just made, and total-up everything on the list to come up with this estimate.
2. If you live in an area where flooding occurs often, you will want a policy to cover flooding.
3. Read over each renter’s insurance policy to see what the standard renter’s insurance policy covers. Then, based on what the standard renter’s insurance policy covers, decide if you will need any additional coverage, and see if they offer the additional coverage you will need. Additional coverage usually costs extra, but if you need it, the extra cost may be worth it. Some additional coverage may include business property, electronic equipment, extended coverage for personal property with limitations, fire department charges, flooding, etc.
4. See which providers pay actual cash value, and which ones pay replacement cost coverage. Next, choose the one you feel is better suited for your needs. Not sure what they are? Merriam-Webster Online (www.m-w.com/dictionary/who) defines actual cash value as “money equal to the cost of replacing lost, stolen or damaged property after depreciation.” Replacement cost coverage would pay what it cost now to replace the item. For example, say you lose a computer you bought for $200 a few years ago, but today the value of the computer you lost is less than what they sell for now, and your policy states it pays “actual cash value.” What will you get for your computer at actual cash value? Only what it’s worth. That’s not good because money would come out of your pocket to buy a new one since they cost more than what your old computer is worth. On the other hand, if your policy pays replacement cost coverage, you would be entitled to what it cost to buy a computer now. Since you haven’t made an investment in renter’s insurance yet, you can avoid the out-of-pocket expense by choosing the policy with replacement cost coverage, and not the policy with actual cash value.
Where to Shop
Some searching on the Internet — with your favorite search engine, of course — will provide you with a selection of insurance providers offering renter’s insurance. Not only will you come up with a selection of renter’s insurance providers, but you may also get a selection of Web sites you can visit to request free quotes. When you request the free quotes for renter’s insurance, many insurance providers will also send you information about their policies. That information will allow you to sit down, compare and study each policy thoroughly.
Just in case you don’t want to spend hours searching the Internet, here’s a list of a few insurance providers to get you started:
– Check with the provider that you currently have car insurance with. You may get a discount if you go with them, because you’re already a customer.
– Visit your local banks. Some banks offer renter’s insurance; start with your bank.
– State Farm Insurance
– GEICO
– Allstate
Shopping Tips
You should now know what renter’s insurance is and how to get a lower premium. In addition, you should have your list of questions, a list of your valuables, pictures of your valuables, video of your valuables, a list of things to take into consideration and a list of possible insurance providers. So, what’s next? Just a few shopping tips for you to use while comparing and studying the material the renter’s insurance providers will be sending your way:
– If you have a roommate, and the provider doesn’t offer separate polices, talk with your roommate about splitting the cost of the renter’s insurance. Sharing the cost with your roommate can save you both a little money.
– Search the Internet for reviews on the insurance provider. You can search using the insurance provider’s business name (place quotes around the business name).
– If the renter’s insurance provider you speak with gives you some names of their current customers, contact those customers and find out what their experience has been like with the company so far. Also, find out if they’re happy with the insurance provider.
– If the renter’s insurance provider doesn’t give you a list of their current customers, visit message boards and forums on the Internet, and post at those places to see if anyone has renter’s insurance with them. You can also ask if anyone has ever had to file a claim with that provider, and find out if the provider kept the promises written in their policy.
– The Internet isn’t the only place to ask around about the renter’s insurance provider. You can also try asking around in your local community.
Before choosing a renter’s insurance provider, ask for brochures, pamphlets or any information they can send you in the mail. Upon receiving the information, compare each provider’s policy and keep the information on the renter’s insurance providers you know are right for you and your needs. In addition to comparing each provider’s policy, study the materials carefully and ALWAYS read the fine print.
Your landlords covered, why aren’t you?
