Any insurance policy that you buy should help keep you and your assets safe. Insurance provides peace of mind and the ability to recover from many losses. Even though renters do not own the property in which they live, that residence is their home and it is filled with their personal property. A family should not be left with just the clothes on their back in the event of a disaster or burglary.

Unfortunately, only 40 percent of renters said they carry insurance, according to a 2015 Insurance Information Institute study. Yetter Insurance believes that this is a problem that can be improved. In fact, the average tenant insurance costs only $15 a month. Considering how valuable this protection could be—it is a smart decision for any renter to explore policies. We are here to help you determine the amount of coverage you need for rental insurance.

What do you own and how much is it worth?

Create a list of any and all items that you own. In the event of a disaster like fire or robbery, it can be difficult to assess what property you need to replace without supporting documentation.

Include everything you own on your list, even kitchen utensils, appliances, clothes, and draperies. You should also document the serial numbers of any appliances or electronics. In tandem, sum up the total value of all of your possessions to estimate your personal property coverage needs.

Inventorying all your belongings can seem daunting, but there are a range of free and paid online services and smartphone apps that can walk you through the process. This makes it easier to add photos and all pertinent info. Check with your Yetter agent on what details you need to include, and search for an app that meets your requirements.

Replacement cost vs. actual cash value policies 

A renter will normally be able to choose between two types of reimbursement for their insurance policy.

“Replacement cost” policies pay for the actual cost of replacing your possessions. They will consider how much it will practically take to replace an item. This is practical for things like televisions, which lose value quickly each year.

“Actual cash value” policies pay to replace your belongings at their value at the time of the loss. That means you get an amount that’s based on depreciation.

If you see yourself renting for the long-term, a replacement cost policy is more valuable, even though it is typically ten percent more expensive. Without one, the difference between the value of your original item and the cost of a new one may be greater than the extra premiums you would have paid over the years.

It is important to note that items like watches, furs, silverware, and firearms have low caps for theft coverage. You will probably not be able to be reimbursed for the full value of any precious jewelry for example. Usually, claim payments cap at $1,500. Higher end personal items can be endorsed on your policy for higher limits.

Liability coverage for tenants

If someone is injured in your home due to your negligence and sues you, a lawsuit could wreck your finances for years. The liability portion of your renters insurance policy covers you in these events, protecting you against lawsuits for bodily injury or property damage. It also covers damage you and your family accidentally do to others.

A renters insurance policy generally covers both the cost of legal representation in a lawsuit and any damages awarded to the other party. Liability limits will start at $100,000 and top out at $1,000,000. Some experts recommend a minimum of $500,000.

You will need to evaluate whether the liability coverage offered is sufficient. Renters who entertain and host parties or who often have guests over for dinner may have greater risks.

Rental insurance can help you find temporary housing

Renters insurance can also provide compensation for alternative living arrangements in the event that your rental unit or rented home becomes uninhabitable due to storm damage or an apartment fire.

Some landlords will require you to have renters insurance before you sign a lease, or to buy it within a certain time period. Usually, though, it’s your call. If renters insurance is optional, ask yourself whether you could afford to replace all your possessions if they were lost, damaged or destroyed. If the answer is no, renters insurance is something you should look into. Often the cost of the tenant insurance is offset by the multi-policy discount if you bundle it with your auto insurance.

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