Renters Insurance 101

Category: Our Blog

Renters insurance is a must have for apartment dwellers; Yet many people fail to purchase it. For some it simply never occurs to them, still others think it’s too expensive or unnecessary. Depending on the survey you believe only 45-33% of renters had insurance in 2012. Whatever way you slice it, that means less than half of the  people who rent carry a policy. The main reasons for this level of exposure are lack of understanding and misinformation.

The first misconception; is that your landlords policy will cover you in the event of a loss. This is not true, most landlords only have a Dwelling Fire policy. This means it covers the physical building, and perhaps a tiny bit of coverage for any possessions of theirs. If a disaster occurred and the building was damaged your landlord’s policy would pay to restore the building. You would be left to pay for replacing your stuff and setting up your apartment again. This is why you need to purchase coverage for yourself.

The second major misconception is that renters insurance is expensive. This is not true renters insurance can cost as little as $12 a month.  Many companies offer great bundles for car and renters together, in some cases the discount added to your auto can be high enough to cause no net increase in your premium.The third reason many people do not purchase renters is that they think they do not have valuable enough property. You may have cheap clothing and furniture, not have any high end stuff. Still if you add up all you own, you may be surprised how much it is worth. These policies are specifically designed for apartments. They are different from a Homeowners and do not expect you to have a ton of personal property. With the low cost of a policy and the probability that you could not afford to replace everything you own in one go, renters insurance just makes sense.

Now you know why you need a renter’s policy, let’s talk about what you need to consider when purchasing one. The form for renters is based off the homeowner’s forms and has many of the same parts. Renter’s has four parts Personal Property, Loss of Use, Personal Liability and Medical Payments. The first part obviously refers to your belongings most companies have a low end limit of $30,000 although a few offer $15,000.  You will need to calculate the amount of coverage you need for yourself.

The first step to doing this is to tally up your large possessions. While doing this you may also want to create picture documentation of what you own in case of disaster. Make a list of all your big stuff; TV, computer, stereo systems, gaming consoles, bed, tables, other furniture etc… Once you have the list figure out how much each one is worth, what did you pay for them? Once you have the list of big stuff you will want to expand it to other kinds of property. Go room by room, kitchen (pots, pans, cutlery, plates, small appliances etc…), den/TV room (DVDs, CDs, rugs, lamps, pictures etc…), bedroom (clothes, jewelry bedding etc…). Calculate what you think the total value of each room is.  Once you have a list tally up the approximation you have made and see what it comes out to. If it is under $30,000 round it up to that.

The other important factor related to personal property to consider is that you want your policy to have guaranteed replacement cost on your contents. This means that if your property is damaged or stolen that will give you the cost to replace it not what it was worth. If you have a two year old couch it will not be worth what it was when you bought it. It may even cost more to buy the same model today, than what it did two years ago. Having replacement cost will insure you get enough money to replace what is destroyed or stolen.

The second part of the policy is Loss of Use this provides you with coverage for costs you incur while a loss causes the apartment to be uninhabitable. This will cover your costs to stay in a hotel and any other costs you have while being displaced. This is calculated based on what you choose for personal property.

The third part is Personal liability, this covers your exposer due to injuries that occur in your apartment. While your landlord most likely has some coverage in this area this will cover him not you. If a person falls, say entering the building, that will most likely be on the landlord’s policy. However if the person is injured inside your place the liability falls to you. Your landlord’s policy also will not protect you, should any injury be due to your negligence. Morrill recommends carrying at least $300,000 in coverage, the minimum is $100,000.

The fourth is Medical Payments this coverage needs to be at least $1,000 most people only carry that minimum. Heath insurance usually makes this coverage unnecessary.

Now you have the facts its time to go out and buy a policy.

Call up your local agent and get some quotes.


Need more information about Renter’s or other insurance?

Call us at 781-762-7300

By: Rebecca L.C. Hoell

Views expressed here are those of the employee who wrote it not the Morrill Group.


Comments are closed.