A May 2013 Insurance Information Institute poll found that only 35% of renters have renters insurance (up from 29% in 2011). But renters face the same risks as homeowners: your possessions can be lost to fire or theft, and you can be sued for causing injury to someone else.

What is Renters Insurance?

Renters insurance provides financial protection for the loss or destruction of possessions when you rent a house or apartment. With renters insurance, your possessions are covered for losses related to:

  • Fire
  • Smoke
  • Lightning
  • Vandalism
  • Theft
  • Explosion
  • Windstorm and water damage (not floods)

Renters insurance also provides liability coverage. Liability coverage protects your assets when you, a family member or a pet injures someone at your home or somewhere else. It will pay for your legal defense costs as well as any judgments levied against you if an injured party sues you.

Imagine that your apartment is damaged in a fire, and you cannot live there while repairs are being made. Renters insurance covers additional living expenses if you are unable to live in your apartment because of a fire or other covered peril. Additional living expenses might include hotel bills, temporary rentals, restaurant meals and other expenses you incur while your home is being repaired or rebuilt.

There are two basic types of renters insurance policies.

• Actual cash value policies will reimburse you for your possessions for the amount that you purchased them for, less depreciation, up to the limit of your policy. This means that you would not be reimbursed enough to buy the item at today’s price, perhaps leaving you unable to sufficiently replace it.

• Replacement cost polices will reimburse you for the actual cost of replacing your possessions, regardless of depreciation, up to the limit of the policy. Replacement cost policies can cost up to 10% more, but the extra cost is probably worth it in the event of a loss.

Take note that basic renters insurance policies only provide limited coverage for high-value items such as jewelry, furs, silver, certain electronics, antiques, etc. You can purchase a scheduled personal property rider or floater for any items that exceed the limits that the policy specifies. Scheduled personal property riders will also cover items for additional perils, such as accidental loss, that are not covered in the basic renters insurance policy.

I Don’t Need It, or I Can’t Afford It, or Something Like That…

Renters often have very specific reasons for not purchasing renters insurance. They usually start with, “I don’t need it,” or “I can’t afford it.” The truth is, the average renters insurance policy costs between $15 and $30 per month, according to the National Association of Insurance Commissioners. Replacing all of your possessions or being held liable for an accident will cost you much more. And that is certainly less than what you might spend at Starbucks each month, or for lunch at the office. If you do the math, you will find out how affordable renters insurance really is.

And remember, you do need it. Your landlord’s insurance does not protect you or your possessions. It only protects your landlord for structural damage to the building, and for his or her own liability concerns.

And, There Are Discounts

Your Shattuck & Grummett independent insurance agent can talk with you about the property you want to protect and what you think you need to be protected from. We can help you shop around for the best policy for your needs at the best price. Discounts are available for renters with security systems, smoke detectors, deadbolt locks, good credit, multiple policies and more.

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