Many people rent apartments or condos rather than own homes in an effort to save money. And while renters normally have fewer expenses than homeowners, one expense apartment dwellers do not want to forgo is renters insurance. If you live in an apartment, or think you would like to move into one, here are the answers to six frequently asked questions about renters insurance.
1. Why Do Renters Need Insurance?
Many property management companies require their tenants to have renters insurance. However, even if your landlord does not require renters insurance, you should get it. Financial protection for you and your personal belongings is one of the most important reasons you need renters insurance.
Many renters erroneously think that their landlord's property insurance offers financial protection for personal belongings in the event of a fire or weather-related incident. However, the landlord’s property insurance only covers the building itself, not the tenant belongings in each apartment.
2. What Does Renters Insurance Cover?
Renters insurance covers the following kinds of personal belongings:
- Sporting equipment
Renters insurance also covers things you rent or borrow, as long as you are in possession of the item at the time.
Renters insurance takes effect in the event your belongings are damaged or destroyed by fire, smoke, lightning, wind, hail, the weight of snow, or volcanic eruptions. If your property is vandalized, stolen, or damaged by an aircraft or vehicle other than your own, renters insurance will cover your belongings.
Other events that qualify for renters insurance include damage from falling objects, riots, explosions, frozen pipes, and appliances that short-circuit. You should know that renters insurance will not cover damage caused by floods, earthquakes, hurricanes, tornadoes, sinkholes, pests, or acts of war or terrorism.
3. What Are Other Benefits of Renters Insurance?
Along with coverage for personal belongings that are damaged in various ways, renters insurance offers other benefits. For example, if you incur additional living expenses due to a fire in your apartment, renters insurance can help cover some of these expenses. One such expense renters insurance could cover is the cost of a hotel room or the rental of a temporary apartment.
Renters insurance protects you in other ways as well. For example, if a guest is injured in your apartment, they will receive some help with their medical costs. If you or any of your family members injures another person or damages their property, renters insurance will cover that as well.
If you have a dog and it bites someone, renters insurance covers bites and other dog-related incidents. You should be aware, however, that some renters insurance policies have certain breed exceptions. Some of these breed exceptions include Pit Bull Terriers, Rottweilers, and American Bulldogs.
Coverage for your personal belongings when you are not in your apartment is another benefit of renters insurance. For example, if your laptop is swiped from your car, or luggage is stolen at a hotel, renters insurance can help cover the cost to replace it.
4. How Much Does Renters Insurance Cost?
The cost of renters insurance largely depends on the value of your personal belongings. In order to get an accurate quote of how much you will pay for renters insurance, you will need to add up the value of all your belongings. The higher the value, the more insurance you will need. Most renters insurance policies have a minimum liability of $100,000 and a maximum of $500,000.
Even though your belongings might be worth a lot of money, you may still be surprised by how inexpensive renters insurance is. The average apartment dweller pays about $14 a month for renters insurance, which equals just $168 a year.
If you bundle your renters insurance with your auto insurance, you may be able to get a discount so you will pay even less. Another way to pay less for renters insurance is to choose a higher deductible.
5. How Does Renters Insurance Work?
Renters insurance works in one of two ways and depends on the type of policy you buy. Actual cash value covers the cost your belongings are worth and factors in depreciation. In other words, the actual cash value is what your belonging is worth today, which is usually different than the price you paid for it.
A replacement cost policy covers the cost to replace your belonging without factoring in depreciation. Because replacement cost policies usually pay out more, they are usually more expensive than actual cash value policies.
6. Who Provides Renters Insurance in Colorado?
If you need renters insurance and live in the Denver or Colorado Springs area, contact L.A. Insurance. To help you find the best price for your renters insurance policy, we will give you quotes from the top 15 insurance carriers. We have helped Colorado residents find the right insurance since 2007.