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Don’t Overlook Renters Insurance

Don't overlook renters insurance.

Even if you don’t own your home, insurance a must.

So you are getting ready to move into your new apartment. You’ve done your research, found a nice place in a good neighborhood, and the landlord seems to keep the property in tip-top shape.

As the last of your belongings are moved in, you plop down on the couch, happy to be done with all the details involved in getting a new apartment.

But think twice before calling your mission completely finished. What would happen if there was a fire or theft in your apartment? You might think that your property would be covered by your landlord’s property insurance, but you would be wrong. The insurance building owners have usually only covers the structure itself, and not renters’ property inside.

To ensure your “stuff” is insured, you need to purchase renters insurance, a close cousin to homeowners insurance.

There are several things to think about when looking at renters insurance. For one, look at the wording of what the policy will cover in terms of replacing items. The insurance terms “actual cash value” and “replacement cost coverage” may sound similar, but the two could give you significantly different results.

Replacement cost coverage does just that: it reimburses you in the amount that it takes to replace your belongings with like items.

On the other hand, an actual cash value policy reimburses you for what your belongings were worth at the time they were damaged or destroyed. And that can be significantly lower than a replacement cost coverage policy because of depreciation and other market factors.

Another thing to consider is whether your policy will cover additional living expenses if your property becomes uninhabitable due to a covered loss. Most renters policies provide at least some additional living expense benefits, but it is best to know in advance what you will be covered for and how much the policy will cost you.

Like homeowners, renters should also make sure you have all of your property documented. Product identification numbers and models should be written down and stored at another location. A quick way to get started is with American Family’s DreamVault, a Web-based home inventory tool that stores your information securely so it can be accessed from anywhere.

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