Save your stuff, get that renters insurance
Adulthood is hard, filled with new and important things that are equally confusing. Like renters insurance. Here’s a crash course that will help navigate through its waters.
- It should actually be called property insurance because that’s what it covers: your stuff. Your landlord has insurance that covers the actual building and structure that you live in; renters insurance covers all you own: clothes, jewelry, furniture, electronics, bike, small appliances, and even art.
- Probably you think you don’t own a lot of stuff, but ask yourself if you can afford to replace everything if something destroyed all or most of it… let me remind you what your stuff means: clothes, jewelry, furniture, electronics, bike, small appliances, art, etc.
- Renters insurance covers your property when it’s inside AND outside of your home.
- Renters insurance will cover your property no matter where the loss occurs, as long as it’s a “covered” type of loss. The “covered” risks include theft, vandalism, fire damage, water damage (excluding flooding) and extreme weather events at a minimum. Stolen laptop at a coffee shop? – Renters insurance will pay. Bike vandalized while parked outside a bookstore? – Renters insurance. Camera stolen on vacation? Yup, renters insurance.
- Renters insurance also protects your property when it’s in your car. In the unfortunate event your car gets stolen and your computer was in it, renters insurance will cover that. In another unfortunate event if you’re in a car accident and your camera gets damaged, renters insurance has got your back.
- It’s not that costly. The average cost of the policy is pretty low, around $10-$20 a month. The exact amount depends on where you live, how much stuff you own, the company you use and your deductible.
- If you already have car insurance, check for discounts on renters insurance if you’re shopping from the same company. It’s a thing called “bundling” and it can save you a little on your monthly premiums. It might even make the cost of your car insurance go down because there are redundancies in coverage.
- What’s your coverage type? The best one is “replacement cost coverage” simply because it will cover the current cost to get you a new version of what you’ve lost. The other one, called “actual cash value” is cheaper, but it only covers the depreciated value of your stuff based on the condition it’s in and when you bought it.
- The deductible is for each claim you make. You might be used to the health insurance policy where you often have a yearly deductible, but with renters insurance things are different. So, if your laptop disappeared from your car while you were grocery shopping in March and your clothes are all ruined by a fire in August, not only have you had a terrible year, you’ll also have to pay your deductible twice. And this is why a lower deductible is usually worth paying a slightly higher premium.
- Usually, the default deductible is $500, but you can choose a lower one or contact your insurance representative to get it lowered. On average, the monthly premiums are raised $1 a month or $10-$12 a year for every $100 you lower the deductible.
- Plans have a maximum limit for each kind of item. Take jewelry, watches and computers—these are only covered up to a certain amount, usually around $1,500. Also, those who work from home with expensive equipment, there’s a limit for them, too. In these cases you can buy an addition to the plan and they’re called “floaters” or “riders”.
- There can be two unrelated roommates on the same policy, even if they’re not both on the lease. However, no matter whose stuff is damaged, claim checks will be made out to both roommates, so you better have a good relationship. And beware, theft by a roommate is not covered.
- If you live in a dorm, your parent’s homeowners will still cover your property. Because technically, you still part of your parent’s household while you’re in college.
- If there’s a fire and you have to leave, renters insurance will pay for hotel, food, laundry, childcare and other expenses that arise because you’re away from home.
- Liability coverage is included for if someone gets hurt in your home. Say your dog bites someone; your renters insurance will cover the medical costs you would be responsible for, including medical and legal fees up to a certain amount. However, if you own an “aggressive” breed, things might be different—check before you buy the policy.
- When lightning strikes… yup, renters insurance!
- Renting or subletting is NOT covered by renters insurance. Think twice before you AirBnB your rented apartment because if anything happens to your stuff during that time, you won’t be protected.
- Home inventory is a must with renters insurance. Either make a video with everything you own or find an app that will keep track of that for you.