What is renter’s insurance?
Renters insurance is essentially financial protection for you and your stuff. It’s like home owner’s insurance for tenants. However, it is much cheaper because it only includes what is inside the home. Some landlords require it, however often it is up to the tenants if they want to purchase it.
Personal Property Coverage
Most policies will cover property that has been stolen or damaged by fire or vandalism. If you live in an area that is prone to flooding or earthquakes that will be a separate policy.
Nearly everything you own will be covered. Tv, Jewelry, Furniture, Clothes, etc. Things it doesn’t cover include, car, pets, roommates’ stuff.
Insurance companies will reimburse you in one of two ways. Replacement Cost policies which will pay for the cost of replacing your stolen or damaged things with new ones. For example, if your bike was stolen, they will pay the cost of replacing your stolen bike with the cost of a new one. Then there are Actual Cash Value policies that pay to replace your things based on the value of them at the time of the incident. So, as you can guess the replacement policies will be more expensive.
The second type of coverage you will get is liability coverage. Which protects you if someone gets injured in your rental and sues you. It sometimes covers medical payments if someone is injured in the property.
How much does renter’s insurance cost?
Renters insurance is one of the most affordable policies you can buy. However, the cost varies by a few different factors. But the average cost I about $180 a year. According to the insurance agency group it is typically around $15 a month.
What can influence the cost of your policy?
• Your location: In general, if you live in a location that is prone to sever weather you can generally expect your rate to be slightly higher.
• Your credit score: In general, the higher your credit score the lower your rate will be.
• Amount of coverage: The more coverage you want the higher your rate will be. This depends on how much you own and the value of the items.
• The safety features installed in your unit: If your unit has a security system such as a house alarm, cameras, etc. already included or one that you choose to place, this could lower your monthly payments because having that amenities will reduce your potential risk of having a robbery.