Renters insurance is a seriously cozy security blanket for your belongings -- plus, it helps cover your living expenses in case an emergency forces you to vacate your place temporarily.
What It Is
A standard renters insurance policy is a "package" of four categories of insurance:
- Personal property insurance protects your stuff: In the event of a burglary or damage, it helps you replace everything from furniture to that novelty flying pig paperweight your honey hates (not that you can put a price on said flying pig, of course). Renters insurance can also protect your belongings even when they're temporarily outside of the home (say, a piece of furniture that's damaged while being delivered).
- Liability coverage kicks in if some jerk gets hurt at your place and sues you, leaving you with medical and legal bills.
- Living expense coverage will help with your expenses if you're forced out of your home. (Yes -- room service!)
- Guest medical coverage pays the bills in case somebody is injured in your home.
Who Needs It
If you think your home is at high risk for, say, a burglary or fire, then it's a no-brainer; but frankly, this type of insurance is so cheap -- and so heartbreaking not to have if you wind up needing it -- that we recommend it for all renters.
How It Works
Your landlord's insurance policy probably only covers the physical structure of your apartment, so don't assume you're fine if he's got one. The benefit limit on a renter's policy is usually a set amount based on square footage, the value of your stuff, and a general idea of your lifestyle. You can also add coverage for anything at your place that's particularly valuable with scheduled personal property coverage -- an insurance policy extension that covers particular items.
Questions to Ask
- Can you add on flood or earthquake coverage?
- Is the coverage limit enough to replace fancy things like furs, jewels, and computers?
- How much is the deductible (the amount you have to pay before insurance will start reimbursing you)?
- Do you need a separate policy if you work out of your home?
- How should you inventory your items to prove they existed if something happens?
- How will you be reimbursed for claims -- will you get the item's current value (an old stereo might only be worth $100 today), or what it costs to replace it with an equivalent new one?
- Does the policy cover your new place if you move, or will you need to set up a new plan when your lease is up? (It usually moves with you, but you can ask whether any of your belongings are only insured mid-move if they're transported a certain way.)
- Does the policy protect your stuff when it's in your car, on your body, or in your office?
Average Cost
About $185 per year -- that's a measly $15 or so a month (although it may cost you more in cities where the risk of theft or vandalism is higher -- the monthly average is closer to $25 in New York City, for example).
How to Get Costs Down
Install smoke detectors, fire alarms, dead bolts, and other protective devices -- your landlord should chip in. Ask one of your current insurance providers (say, your car insurance company) to give you a quote for other policies you're looking into. Many companies offer discounts for bundling your policies with them: You could save between 10 and 20 percent.
Illustration by Joora Song
by Kristen Finello
7/2/08
See more:
buying a home,
Real Estate,
Renting