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How Much Renter’s Insurance Do You Need?

Young couple sitting on the floor of their new apartment and searching for renters insurance online

If you live in a rented apartment, condo, or other living space, having a renters insurance policy is a smart idea. Rental insurance can help you regain any possessions that were lost, stolen, or damaged during an incident, along with protecting your visitors should they be injured in your home. But how much renter insurance do you need?

Apartment renters insurance is relatively affordable, but it is important to make sure that your policy can fully cover the cost of repair or replacement of every item in your home. There may also be cheap renters insurance that will work for people that have fewer assets, but can’t fully cover all the expenses for others. Here is some information, tips, and guidelines to consider in order to obtain the best renters insurance policy for you.

Take Inventory of Your Possessions

The average American renter has somewhere between $20,000 to $30,000 worth of possessions in their home. In order to make sure you don’t have too little coverage, you’ll need to take an inventory of your possessions. Take photos of all of your clothing, furniture, electronics, and other items so you know what you have and keep a record of them. Keep receipts or research the cost of your items. For certain possessions like electronics, note the make, model, and year so you have an accurate value. Once you’ve collected all the price data, add it up in order to get accurate renters insurance quotes that could cover the total sum.

Gauge Your Liability

Apartment insurance/renters insurance also provides liability coverage if a visitor gets accidentally injured in your home. It also covers any damage you may accidentally do to another person’s property. A typical renters insurance policy covers up to $100,000 for liability coverage, with some policies including legal fees and court settlements if you are sued. It is up to you to decide if that is enough coverage, however it is smart to get a larger policy if your combined assets total more than $100,000.

Fair Market Value Versus Replacement Value

When you compare renters insurance coverage, many policies will use the term “fair market value” or “replacement value.” There is a key difference in these terms.

If an insurable item is lost, stolen, or damaged and your policy dictates that it will compensate you with the fair market value, you will only get the calculated current cost of that item if it were sold in an open market. This will take the depreciation of that item into account. In other words, if four years ago you bought a new 32-inch flatscreen TV and it was damaged, you would be compensated the estimated amount of a 4-year-old used flatscreen. It will generally be worth less than what you initially paid for it.

However, replacement value means that your insurer is willing to pay the cost of a comparable replacement of an item. This means your insurance company is willing to pay the cost of a brand new 32-inch flatscreen TV to replace your damaged 4-year-old one. It is important to read through your policy carefully to see that you are getting the coverage you want in accordance to the renters insurance cost.

Get Extra Policies for Highly Valued Items

If you have some highly valued antiques, collectibles, jewelry, or other such high-ticket possessions, you may want to purchase individual protection for those items. Depending on the individual worth of the item, your typical renters insurance plan may not provide enough coverage to offset the cost of replacement. There may also be some restrictions in place in some renters insurance policies that exclude coverage of certain items such as artwork or artifacts. If you have items of such value, talk to your insurance agent to get an additional rider or separate insurance coverage for them.

Consider Additional Protections and Coverage

While typical renters insurance covers a wide range of hazards with monthly payments averaging around $15-$30 per month, there some hazards that aren’t covered by a standard renters insurance plan. Certain hazards such as flooding or earthquakes may not be included in your plan. It is important to thoroughly read what is covered by your renters insurance policy and get any additional protections you feel are necessary.

Now that you have an idea of how much renters insurance you need, you may want to invest in a better policy. Freeway Insurance can offer you quality renter insurance offers from a wide range of providers. Give us a call at (800) 777-5620 or get a free renters insurance quote online in order to protect your possessions without breaking the bank.

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