How to Select Renters’ Insurance Right for You

Protect Yourself and Your Belongings with the Right Renter’s Insurance

by Erin Scobie

Most renters are unaware that their landlord’s insurance policy only protects his or her property. As a renter, all of your belongings are your responsibility to insure against damage or loss.

The trick to selecting the right type and amount of renter’s insurance depends on how much protection you need. Since renter’s insurance is for your protection, you need to decide what needs protecting by assessing both what you own and the cost of repair or replacement.

Questions to Consider

Hopefully, you will never need to use your renter’s insurance, but you do need to imagine the possible emergency situations in which the quality of your policy can make a difference. For example, if your home were destroyed by fire or damaged by a natural disaster, you’d need money to replace your belongings. If you are a victim of theft and/or vandalism, you’d require reimbursement for your losses and repairs.

Take Stock of Your Assets

The amount you pay for your homeowners insurance depends on several factors, most notably, the assets you want to protect. So take a walk around your home and take inventory of what you will need to be protected under your insurance policy.

Create an inventory of your home’s contents. Do not discount items as invaluable. Even low-cost items can add up if you have to replace them all at once. Make note of any valuable collections or artwork. Determine how much coverage you need for paintings, heirlooms, and jewelry. Many policies allow you to add a scheduled personal property endorsement that can provide coverage for personal special belongings. You may not want to have to take out loans just to get things replaced.

Assess Your Financial Situation

Should you face loss or damage to your property, how much out-of-pocket expenses do you or can you take on? Decide on what makes more sense given your financial situation. Would you rather pay a higher monthly insurance payment in exchange for larger coverage and/or a smaller deductible? During an emergency or after property damage/loss, you may find yourself facing unforeseen expenses for repairs and replacements. Determine how much of these costs you need your policy to cover.

Questions to Ask Before Choosing a Policy

Before agreeing to a rental insurance policy, make sure you have the answers to the following key questions:

1. How much will it cost to replace your belongings if they are damaged or destroyed?
2. Can you get a discount for having multiple policies or installing a security system?
3. Are your guests protected if their property is damaged or lost while in your home?
4. Are you protected against bodily injury and property damage claims? If a guest is injured in your home, will the policy cover their medical expenses?
5. Should you supplement your policy with umbrella liability insurance for protection of special personal possessions such as antiques or collectibles?