Roughly speaking, renters insurance covers you as well as your belongings in a rented apartment or house. The policy also mitigates your financial risk, meaning it covers your potential liability should an insured event happen. I recently talked to an insurance industry executive, who told me that an increasing number of policyholders make costly mistakes when buying renters insurance, simply because they don't ask the right questions or just fail to ask any question at all. Don't make that mistake; inquire as much as possible during the account-opening process and make sure the company you are dealing with has a strong financial rating. The insurance industry expert also said that you could save money via reduced premiums if you do your homework in advance and read a lot about the insurance company with which you want to conduct business.
What Risk Events Does Renters Insurance Cover?
Don't simply say yes to pleas for travelers renters insurance that companies send you every now and then. Ask questions, lots of questions. Most importantly, ask a prospective renters' insurance company what specifically is included in the contract. Typical things you would see in a renters insurance policy are as varied as personal stuff, damages to the property that are not structurally related, and perils like fire and storm.
Are all My Personal Belongings Covered?
Most renters insurance policies would cover your personal belongings, but again, ask if in doubt. Don't take the insurance agent's word for gospel truth. Read the policy contract and ascertain that your personal stuff-that is, everything from furniture and electronics to jewelry and artwork-is covered. There could be limitations on coverage, especially for rare or pricey items, so ask your renters insurance agent to clarify all these areas before enrolling in the plan. Trust me; spending a few minutes upfront to discuss these things would save you much money, energy and time later on.
What Is the Insurance Company's Financial Rating-And How Long Has It Been in Business?
In my view, this is the most important topic, which could make or break a traveler renters insurance company's deal. Why? Well, for one, a company-especially an insurance business you want to count on in difficult times-must be viable and present when disaster strikes. Second, some risk events could wreak substantial havoc that require sizable payouts, so you definitely want a deep-pocketed insurance company to take care of your needs, not a company that is just happy to collect premiums month after month and that cannot help you out when you need it the most.
What Renters Insurance Coverage Should I Get-And How Much Would The Premium Be?
The type of renters insurance you should get depends on a hodgepodge of factors, notably the variety and worth of your personal belongings along with the more nebulous concept of "how emotionally you are attached to a specific item." For example, World War II memorabilia that Grandpa bequeathed to you on his death bed typically would carry more emotional significance than, say, the latest iPod you bought while standing in line on a bustling New York City downtown street.
Make a list of personal belongings and categorize them. Personally, I use a three-tiered system: H for high, M for medium, and L for low. So I normally would ascribe an H to high-worth jewelry-not that I have that much, anyway-and would rate my worn-out Adidas sneakers an L.
By categorizing your items that way, you easily could figure out whether it is worth insuring everything or maybe ascribing insurance value only to the high-value items. Remember, the last thing you want is to pay more in premiums than the fair market value of the item insured.
To determine your premium, you can barnstorm the offices of traveler renters insurance companies in your residence area. Alternatively, you can call their customer service reps or look for live chat options on the insurance companies website.
Generally, though, you can get a quote from any reputable insurance company that wants to play a major role in the renters coverage niche.
Is all My Stuff Covered under a Renters Insurance Policy?
This is a question you should pose to the renters insurance agent. As I said earlier, nearly all of your personal belongings are covered. Now, there may be some items on a restricted list, and you can purchase additional coverage for those. But that also depends on the insurance company's business model and risk comfort. For example, if you have expensive artwork-say, a $260 million The Card Players painting by Paul Cezanne-it makes sense that the traveler insurance company would want to think twice, or three times, for that matter, before providing coverage.
Does Renters Insurance Coverage Applies if My Stuff Gets Stolen or Damaged Outside of My Apartment?
Relax; you are covered. Most travelers renters insurance plans provide risk mitigation and financial coverage if someone steals your stuff outside of your apartment. The same holds true if your personal items get damaged off premises. Note, though, that everything inside your apartment is covered de facto. But, again, talk to your insurance agent and see whether your policy is up-to-date on those issues, or whether you should buy additional coverage to mitigate losses resulting from off-premises hazards like fire, storms, water breaks from burst pipes, and vandalism.
Are My Pets Covered?
The liability portion of your renters insurance plan typically would cover you-and your dog, for that matter-if it bites or causes severe injury to someone in or outside of your apartment. That said, it is a different matter if you own a large or territorial breed like a St Bernard, Great Dane or pit bull. Talk to your insurance agent to learn more about pet coverage options within your renters insurance policy.
Does Renters Insurance Coverage Applies to My Roommates?
Your roommates typically are not covered by your renters insurance policy, but it is not uncommon to see an traveler insurance company making an exception to that rule. Talk to a customer service rep to get more information. Generally, a renters insurance policy covers you and your spouse along with relatives who live with you.
What if Someone Gets Injured Inside My Apartment?
If someone gets injured in your apartment, and you are not at fault, your building's hazard insurance plan will kick in and cover the costs. If it is your fault, the liability portion of your policy would apply. Note, however, that if you sublet your apartment to someone, you are on your own and neither your renters insurance plan nor your landlord's hazard insurance policy would apply.
Insurance companies often spend millions of dollars to wage public-relations campaigns to attract prospective policyholders and burnish their image as strong brands. But don't let all that marketing façade distract you when shopping for renters insurance. Ask specific questions, take notes and double-check everything insurance agents tell you. For example, if you have time, you can call the same company twice and talk to two agents to make sure you get the same answer. You can do the same with agents working for various companies. The goal here is to inquire and to systematically cross-check every information insurers share with you.