How Does Renters Insurance Work? How it Can Save You From A Disaster

While you might not know whether or not you need renters insurance, you’ll find that most people who rent any kind of dwelling could benefit from it. Whether or not you think that you’re running the risk of any kind of disaster, you’d be surprised to find out just how commonly people use their insurance. Once you realize how does renters insurance work, you’ll find that it could easily apply to your life.

Here are four things you need to know about renters insurance.

1. Your Landlord Isn’t Going to Help

While most renters rely on the owner of the dwelling they rent to handle everything for them, landlords aren’t as liable as you might think. Renters often live under the mistaken idea that if something happens, landlords have them covered. In the case of a flood or a fire, the landlord’s insurance policy is going to protect the landlord first and foremost.

In a general sense, you can expect just the property you’re living in and the appliances inside of it to be covered. If you’ve rented any furniture from them with the apartment, that’s covered as well. However, any of your possessions aren’t going to be covered by this policy.

Take a look at your lease if you have any concerns about this. It’s often apparent in your rental agreement that what you own is your issue and needs to be protected by your own policy.

There are a few cases where a landlord is responsible for reimbursing you for anything that you’ve lost. If a negligent landlord has failed to fix faulty electrical wiring which leads to a fire, then that’s on them. Since you might have to sit in court for months or even years to be reimbursed, it’s worth your while to have your own policy to protect you.

2. You Can Get It For Any Type Of Rental

No matter where you are and what type of dwelling you’re renting, there’s potential to get a renters insurance policy. It usually kicks in on the day you purchase it and covers you for the amount of damage that you claim in your policy. Policies generally range from $10,000 to $100,000 and aim to cover anything in your home that’s destroyed.

While you can get replacement cost coverage, it’s usually the more costly option. The alternative is to get the cash value of used items. However, some items might have little monetary value but have a value that makes them worth much more than insurance adjusters would price them at.

If you take out a policy, read through your policy carefully with your insurance agent. If your home is damaged due to a flood or a natural disaster, you might need separate coverage. Some policies will deal with items stolen from your car, given it could be on the property you live at.

Compare policies before you decide on one and have your insurance agent walk you through it step by step. Don’t be afraid to ask questions before you sign on the dotted line. It’s your home and you’re belongings that you’re talking about after all.

3. It’s Not That Expensive

One of the great things about renter’s insurance is that it’s nowhere near as expensive as other types of insurance. Renters often avoid buying insurance for their rentals because they assume it’s going to cost them a fortune. Since you’re not insuring the structure that you’re living at, it’s often much cheaper in the long run.

The average cost of renters insurance comes to around $15-$30 a month, which is less than you’d spend on most other expenses. For the peace of mind of protecting all of your belongings, it’s well worth the price.

For the most part, your renters’ insurance policy is going to depend on where you live. The cost of your home, the frequency of disasters, accidents, or burglaries are going to have an impact. Another factor that impacts price is the density of the neighborhood.

If you live in a city where lots of people are renting, in a neighborhood that’s mostly crime-free, you can get a renter’s policy for pennies a day. Rather than having to worry about losing expensive belongings, you get to be assured that you’re covered.

4. Premiums Are Based on a Few Factors

For the most part, the range of premium prices depends on your ZIP code. As mentioned above, the crime, environment, and density of the region come into play in a major way. Whether you’re renting an entire home or just an apartment becomes a factor as to how much you’ll be paying.

If you’re located in a floodplain that gets a lot of rain and sees a lot of damage throughout the year, expect to pay more. If your home is going to be flooded several times in the year, it’s no wonder you might be asked to pay more than someone in a better environment.

Your premium is also set to depend on the kind of coverage that you need. If you need something fully comprehensive, expect to pay more to get everything covered.

One of the ways you can save is by boosting your credit score. If you show your responsibility in other ways, you can ensure that you get a better price. Also, if you’re buying any other type of insurance, you can save by bundling your policy.

For the best insurance to suit your needs, check out this helpful article.

Still Wondering How Does Renters Insurance Work?

If you’re still stuck asking “how does renters insurance work,” then it’s probably time to call an agent. If none of the above applies to you, that doesn’t mean that you don’t need insurance for your rental. You just need to find the reason that suits your own rental needs.

If you’re looking for a dependable insurance broker, check out our guide to finding one.

Melissa Thompson
Melissa Thompson writes about a wide range of topics, revealing interesting things we didn't know before. She is a freelance USA Today producer, and a Technorati contributor.