Tenant Insurance

Question: How do I get renters insurance?
Answer: It’s easy. 

If you have a car, talk to the agent who does your car insurance. If you don’t, start with your friends. Ask them who their insurance agent is. Or head for the yellow pages. There is also this list of insurance companies who offer renters insurance, though they don’t have coverage in all areas. Shop around for the best rates and coverage for you.

What to Consider.
There are some questions you should ask yourself and issues  to consider before you go shopping for renters insurance. Take a look at actual value vs. replacement cost, endorsements, and liability.
Why you need it.
Dispel some of the myths of renters insurance. Your landlord’s insurance will not cover your possessions, neither will your roommate’s, and it isn’t all that expensive to purchase.
Why and How Much?
The first time most people think about insurance is with their first car or home. Usually this is because the law or bank requires us to do so. Although renter’s insurance is usually not required, it is just as necessary to have. Not only will it protect your personal items, but it will also give you help with temporary housing and liability protection, such as medical expenses for people on your property or a lawyer if you are sued by someone unintentionally injured by you. Once you determine your need for renter’s insurance, knowing your options will help you choose the best policy.
If the ceiling in your rented property is damaged by wind or hail in a storm, of course the ceiling is covered by your landlord. But what about your brand new stereo and TV that was damaged? Also, while the ceiling is being fixed, do you have enough money to immediately find another place to stay? These are the types of things that would be covered by your renters insurance policy. Along with personal property coverage and living expenses, your policy will also cover your liability or damage you cause to others or their property. For example, your girlfriend comes over to visit and she slips on the ice outside your door. The same walkway that is your responsibly to keep clear! Your girlfriend needs medical attention and decides to sue you! Renter’s insurance can’t help with your broken heart, but it will help you pay for your ex-girlfriend’s medical expenses and a lawyer.
Now that you have decided renter’s insurance is for you, there are some things to consider when purchasing your policy that will affect the price and coverage:
  1. Dollar Amount of Coverage: This is a leading factor in the price and coverage. A dollar amount is not placed on each piece of property. Instead a fixed amount for all of your possessions will be determined. Of course, the more coverage you purchase, the higher the price of the policy.
  2. Deductible: This would be a leading factor to consider in the cost and how much you are willing to pay out of pocket before your insurance kicks in. Coverage’s subject to the deductible would be everything except liability coverage’s, like paying for your girlfriends medical expenses.
  3. ACV (Actual Cash Value) or Replacement Cost: When the insurance company comes to reimburse you for your stereo and TV what they give you is determined by these factors. A basic policy will pay you ACV, which is the value of the property at the time of loss. But, if you opt for replacement cost you will get an actual replacement. For example, your 5 year old stereo will be replaced with as much money as it would cost for you to purchase a new comparable stereo. Expensive items prone to theft such as jewelry and guns, only have limited coverage so it is wise to place these items on a separate policy. Replacement cost is well worth the small amount more it may cost for your policy.
  4. Location and Previous Claims: If you rent in an area prone to thefts you will probably pay more for your insurance and if you or the previous person or neighbors have had a large amount of claims, this is likely to affect the cost of your policy.
Even if you feel your personal property is not worth enough to insure, the value of having liability coverage is well worth renter’s insurance. Remember, as with all insurance policies, check with your agent on specific coverage’s. Each policy can vary between companies and states.
What to think about.
A basic renters insurance policy will cover you in case your belongings are lost due to burglary, fire, burst water pipes and the like. It will also provide liability coverage should someone be injured on your property. Another thing renters insurance will cover is damage you cause to the landlord’s property (say, if one of your party guests breaks a window). Here are some questions you will need to consider before speaking to an agent about getting insurance.
Replacement Cost vs. Actual Value. 
A basic policy usually provides for the actual cash value of your belongings. This means that a 3-year-old computer would be covered for its initial cost minus depreciation. A computer may well have almost fully depreciated after 3 years, so you would receive little or no cash for it. If you have expensive electronics or other pricey items which are subject to depreciation, you might want to consider replacement cost coverage instead. In this case, you would be reimbursed for the complete current cost of buying a new computer or stereo. Of course, replacement cost coverage is more expensive, but may be worth it in many cases.
Deductibles.
Like any insurance policy, renters insurance will have deductibles. This is the amount of loss you will have to cover out of pocket before receiving any money from the insurance company. For example, if your deductible is $350 and your computer (on which you’ve got replacement cost coverage) would cost $2000 to replace, you would receive $1650 if it were stolen. The higher the deductible, the lower the premium, but you must balance your ability to cover the deductible with the monthly premium savings.
Endorsements.
Like homeowners insurance, renters insurance usually won’t cover you for “acts of God” such as floods and earthquakes. You can get endorsements for these, however, and you should seriously consider them. Endorsements can also be used to extend the amount of coverage on the policy or the incidents which are covered.
Loss of Use Coverage. 
If something happens that means you can’t live in your apartment for a period of time, you may have to live in a hotel and eat meals out. Your renters insurance can and should cover such “loss of use” just as your auto insurance covers a rental car while yours is in the shop.
Liability.
Your basic renters insurance will include liability coverage should someone be injured in your apartment. As with car insurance, there is a per-incident limit on this coverage, and you should make sure this is high enough. Increasing liability coverage will often not increase premiums much at all.
Floaters for Special Items.
If you have such items as valuable jewelry, antiques, furs, or other big-ticket items, they often will not be completely covered under a basic policy. To fully cover these items from loss, you will want what is called a floater. These are essentially separate policies covering only these items and can be very inexpensive relative to the replacement cost of the items. This brings us to an important thing to consider when purchasing insurance: the household inventory.
Inventory.
Before heading out to shop for renters insurance, take a look around. Inventory the possessions you would most want or need replaced were they to be lost as well as any big-ticket items for which you may need special coverage. This could include your stereo and/or computer equipment, antiques, jewelry, furs, appliances, or photography equipment. Gather details of make, model, serial number, age and costs (both purchase and current replacement) and put them in a spreadsheet or just write them down in one place. It may also help to have photos of these items for identification purposes.
Appraisals.
If you do have such things as antiques, jewelry, furs, or other items not easily replaced but highly valuable, it may even be a good idea to have an insurance appraisal done so you can be sure to have the coverage you need as well as the paperwork you will need to collect should they be lost. The appraisal can be done by an expert in the field (jewelers, furriers, and the like) and will usually include a photo of the item and the expert’s description and appraisal of value. These appraisals, as well as a complete inventory of the items in your property, should be kept somewhere outside your apartment or at least in a fire proof safe. Often, you will be able to place copies of such paperwork with your insurance agent.
Now that you’ve considered these items, it’s time to head out and look for the best policy for you.
Protect Your Belongings: What to Think About.
You return home to your apartment to discover a water pipe has burst and your computer is sitting in two inches of water. You go away for the weekend and come home to find your home has been burglarized. You have a party and one of your guests slips in the kitchen and breaks her leg. The building you live in burns down, taking all your worldly possessions with it.
These are scenarios none of us wish to contemplate, but they may happen at any time. How can you protect yourself if your home entertainment system is stolen, your best friend breaks her leg helping you hang curtains, or everything you own is lost in a fire?
Two words: renters insurance. Like homeowners insurance, renters insurance will protect all your personal possessions from loss and protect you from huge legal and medical bills should someone be injured in your apartment.
MYTHS ABOUT RENTER’S INSURANCE
My landlord’s insurance covers me. 
Not true. This is a common misconception among renters, and it is untrue in almost all situations. Your landlord carries insurance that will cover his loss in a situation where the building is destroyed or damaged in some way. Your landlord is covered in case someone (including a tenant) is injured on the property, though not in your apartment.
Renters insurance is expensive. 
Not true. The average renter can get complete coverage for a couple hundred dollars or less a year, depending on where he or she lives. This is a small price to pay for knowing that you and your belongings are protected, isn’t it?
My roommate has insurance, I don’t need it. 
Not true. Your roommmate’s insurance will cover their possessions, but it will not cover yours unless you are listed on their policy. It is possible (and even encouraged) for roommates to get a single policy to cover all inhabitants and possessions in the apartment.