Your landlord's insurance policy will cover the building if disaster strikes, but it won't cover your belongings. That's why you need renters insurance.
A policy costs around $200 a year, on average. It covers renters against losses from fire or smoke, lightning, vandalism, theft, explosion, windstorm and water damage. Policies will reimburse you the difference between your additional living expenses and normal living expenses. Plus, renters insurance helps cover legal costs if you're taken to court because someone is injured at your home.
Here’s how to determine what you need:
Create a home inventory to determine the value of all of your belongings. A policy will pay to replace your possessions. If you have expensive jewelry, collectibles or art, consider scheduling them on your policy to provide more coverage. Standard policies offer only a limited amount of coverage for these items. You'll need receipts or appraisals for items to be covered.
Your deductible is the amount you'll pay out of pocket before insurance pays for a loss. The higher the deductible, the lower your premium will be. So if you can afford a higher deductible, you'll save premium over the course of the year.
Although losses from fires, lightning, windstorms, theft, vandalism, explosions and certain types of water damage are covered, standard policies don't cover floods or earthquakes. You can get flood insurance through the federal government's National Flood Insurance Program (NFIP). Check with your insurer about getting separate earthquake policy. Flood Insurance is valuable if you live on a ground floor or lower lever apartment, especially if you are in a designated flood zone. Your municipality can let you know what zone you are in.
Liability is most important because renting sets you up for damage caused to others. Apartment dwelling increases your responsibility towards others; for example a toilet or bath tub overflows in your unit and damages another unit. Policies provide $100,000 and $300,000 worth of liability coverage as a minimum recommendation. If you feel you need more liability coverage, policies can go up to $500,000. After that, consider getting an umbrella policy for an additional $150 to $300 a year for $1 million worth of coverage.
Many insurance companies offer a variety of discounts. For example, you could pay less if you have a security system, smoke detectors and deadbolt locks. And, you can get multi policy discounts for auto policies too.
A building you rent may be properly insured, but you may be exposed. Make sure you are equally protected.
