You insure your car. You insure your health. You even insure your life. So why wouldn’t you insure your belongings when you’re in (or about to enter into) a rental agreement? Circumstances might call for replacing some or all of your prized possessions, so ensuring you have a little assistance in paying for these replacements is a no-nonsense decision.
Here are five factors to keep in mind when determining your renters’ insurance needs.
Identifying what you have
In order to know whether or not renters’ insurance is the right choice (and which type of policy for that matter), you need to know what you have. Take stock of your belongings, particularly your high-end items like furniture, jewelry and electronics. Make an inventory of your belongings, along with evidence such as images and receipts. Determining the total value of your priciest belongings will help you decide what level of insurance you need. And even if you don’t have receipts or a recollection of how much a given item cost, a ballpark will at least get you on the right track. From sofas to lamps to vacuums to computers, write it down.
Determining a deductible
Insurance isn’t just about identifying a loss and getting that amount paid out to replace that loss. You have to decide what your deductible, or the amount you’ll pay before your insurance payout kicks in, will be. These generally can be as low as $500 and as high as a couple thousand dollars. Determine how much you’re willing to pay out to replace lost items such as TVs, jewelry or clothing. And keep in mind that the higher your deductible is, the lower your monthly payment will likely be.
Selecting your coverage
Once you have an idea of what you own, its value and how much you’re willing or able to pay to replace it, you can select a coverage level that makes the most sense for you. While most coverage options bottom out at about $10,000, you can choose the number that most reliably matches the value of your combined belongings. Usually there are two types of coverage you’ll need to decide between - you can receive payment either based on the depreciated (or decreased over time) value of your belongings or the replacement value. The latter option will typically mean your monthly payment is higher, so keep that in mind as well.
Checking for discounts
Just like you may experience with other forms of insurance, often-times bundling your policies together can offer you certain discounts on your billing. If you get your insurance from the same provider, you can often decrease the cost of both policies. (Think of it like your phone or cable package – the more services you sign up for, the less they cost on an individual basis.) Just don’t forget that bundling to save a few pennies now doesn’t necessarily mean that company is offering you the best fit for your insurance needs – prioritize the above factors first, and then focus on finding eligible discounts.
Planning for your region
Not all renters’ insurance policies are created equally. Some include add-ons to get more coverage for your buck. And when you live in a region in which certain types of natural disasters are more likely (i.e., hurricanes, tornadoes, fire, etc.), it might be a good idea to get added coverage if they’re not already covered in your policy. One of the biggest occurrences of this sort of incident is flooding. It’s often not part of a basic renters’ insurance policy, so if your region is prone to floods, the add-on might be worth it. Take stock of what makes your region unique, weather-wise.
It is important that your belongings are insured in case of fire, theft or some other cause. These tips should help you remain adequately covered.