Did you know that the average person has over $20,000 worth of personal belongings? When you consider the cost of electronic equipment, clothes, jewelry, tools, kitchen gadgets and other personal items, you probably have far more invested in your personal property than you realize.
Though many people mistakenly believe renters insurance is expensive, the cost of renters insurance is generally quite affordable. You can typically expect to pay between $100 and $250 per year on average, depending on where you live and the coverage amount you carry on the insurance policy. The national average for renters insurance is $15 to $30 per month.
When you choose a renters insurance policy, you will need to choose coverage amounts for three basic types of coverage:
The best way to determine how much insurance you should carry for your personal property is to create an itemized list of your belongings and their replacement costs. It is important to determine how much it would cost to replace each item as brand new. This should give you a ballpark figure for the total amount of insurance coverage you should carry.
Certain items such as jewelry, collectibles or other valuable items may have a value limit or require additional insurance coverage to provide full coverage for loss, theft or damage. You will also be responsible for a deductible, which is an out-of-pocket expense.
Renters insurance covers fire and smoke damage after you pay your deductible. In the event of a fire, you will file a claim for the loss, pay the deductible for your policy, and then receive compensation for the remaining costs of your loss, up to the limits of your policy.
It is much the same with theft. After you pay your deductible amount, renters policies typically cover your belongings whether your rental home is burglarized or the items are stolen from your car or while you are traveling. The amount of compensation you will receive depends on the type of loss and the amount of coverage you have in place. For example, you can buy “actual cash value” (depreciated) coverage for your personal property, or you can buy replacement cost coverage for your personal possessions.
Most renters insurance policies, however, do not cover damage caused by floods. Like home owners, renters must purchase flood insurance separately to be covered for damage from flooding. But if your belongings are damaged by a water leak within your rental unit, you will likely be covered. Be sure to read your renters insurance policy carefully so you know what is and is not covered.
Review the specifics of your policy to determine the circumstances under which you can file a renters insurance claim. You can discuss your insurance options with an Insure Forward agent in your area. Our agents have access to several different insurance companies, and can help you compare policies, get quotes and find the right policy for your particular circumstances.
Reprinted with permissions from Trusted Choice