Whether you are a long-term renter or just leasing a studio apartment for a few months, you need renters insurance to protect your possessions and finances against possible loss. This affordable coverage is not the same as your landlord’s insurance, which protects the structure of the house or building you live in. Instead, it protects you and the things you own against unexpected loss.
Understanding Renters Insurance
Renters insurance works by reimbursing you for certain types of losses. These include damage or theft of your personal belongings due to a covered event, as well as any financial liability you may acquire due to accidentally injuring another person or damaging their property. It can also cover the cost of temporary living expenses if you are displaced from your home.
Often, landlords require tenants to purchase and provide proof of renters insurance before entering a lease agreement. Even if you are not required to purchase it, however, we still recommend this coverage as a means of protecting your income and assets. The coverage typically costs less than the price of a latte per week, but it could save you tens of thousands of dollars in potential losses.
Types of Coverage in a Renters Policy
When you purchase typical renters insurance, you receive several different types of coverage under one policy. These coverages work together to minimize your risk exposure both now and in the future. A renters policy may include:
Liability protection is an important part of any renters policy, as it protects you against financial responsibility for a third-party’s injuries or property damages. While this may not sound like a direct benefit for you, it could actually spare you of tens or even hundreds of thousands of dollars in legal fees, judgements, and other associated costs. Without liability coverage, you could still be held responsible for any injuries or losses caused on your property or due to your negligence.
Liability coverage extends to you and the members of your household – including pets. It also follows you outside of the home, meaning you can be covered if you accidentally wheel your cart into someone at the grocery store or your pet injures a child at the park.
If a fire in your neighbors apartment spreads into your living space, too, you may need to temporarily relocate until the apartment can be repaired and remediated of damage. During that time, renters insurance can help cover your additional living expenses, such as hotel fees and restaurant meals since you cannot cook in your own kitchen.
Personal Belongings Coverage
This section of your renters policy outlines the coverage available for the things you own, including things that may be damaged away from home. For example, your policy may cover theft of your bicycle whether it is stolen from your garage or lifted off the rack on your SUV. Although there are exclusions, renters insurance typically covers belongings against damage or loss due to a wide range of events, such as:
- And more
When you purchase your renters coverage, you may be asked to select a coverage amount for your personal belongings. This is the total available coverage for all losses combined for a single claim event. You should choose this number carefully, as under-insuring yourself could force you to absorb a staggering loss.
The next thing you may notice is the ‘special coverage’ limits in your policy. These are often applied to certain categories of items, such as firearms and jewelry. Many renters opt to schedule additional coverage for high-value items that require coverage beyond these lower limits.
If you need help choosing a coverage amount or scheduling additional protection for your belongings, our office is here to help. We can show you how to use a home inventory to assess your actual coverage needs and keep your policy updated as your needs change over time.
Filing a Claim
If you need to file a claim against your personal belongings coverage, the loss will be subject to your deductible. You can choose your own deductible, but keep in mind that this amount will be subtracted from your claim settlement. If you prefer to minimize your out-of-pocket losses after a claim, choose a low deductible. If you prefer upfront savings on premiums with a greater personal responsibility for your claim, choose a higher deductible.
The insurance company will assess your loss according to the terms of your coverage. You may opt for the standard actual cash value (ACV) coverage that only reimburses you for the depreciated value of your belongings, or you can upgrade your coverage to provide total replacement value so that you can purchase brand new items to replace your damaged or stolen ones.
Making Renters Insurance More Affordable
We know you want the most reliable and efficient renters coverage at the most affordable price. Fortunately, renters insurance is very affordable, costing an average of about $200 per year. However, we will not settle for ‘good enough’. When you partner with Krog Insurance, you are gaining access to competitive quotes from multiple Minnesota insurance companies. We search and compare rates to bring you affordable, budget-friendly renters insurance policies that do not sacrifice the quality of your coverage.
We can also show you other ways of increasing your savings both now and in the future. For example, you may qualify for discounts on your coverage if you combine your renters and auto insurance with the same carrier. Likewise, you could save if you implement a home security system into your apartment or remain claims-free for an extended period of time. Ultimately, the key is working closely with your agent to determine the most effective course of action for minimizing your costs.