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7 Tips To Help You When Buying Renter's Insurance

from Brodbeck Porter Insurance Agency

Mar 28, 2014

Tip #1: One Lump Sum Could Save You...

Everybody wants a discount and to pay less. With renter's insurance, just like your car insurance, you can usually pay in one lump sum for the entire year and get a huge discount. Most insurance companies will allow you to pay a monthly premium, however they charge extra for installment plans. Sometimes up to $10 a month extra, in fact. In that case paying one lump sum payment would save you up to $120 over the year, which is not bad at all.

Tip #2: Understanding the Claims Process is Crucial...

It's important that you know how to file a claim before you need to file it. Most people end up learning as they go when filing an insurance claim because they rarely have to file one. So it's crucial that you know the numbers to call, who you'll need to speak to immediately and exactly what information you'll need so that you can have that information all in one spot, readily available for you to use when filing your insurance claim...

Tip #3: Evaluate the True Value of Your Personal Possessions...

When it comes to buying renter's insurance, it's truly not the time to guess. Guessing can end up costing you a lot of money and heartache. You likely have absolutely no idea how much your possessions actually are worth. In fact, it's said that the average person owns $20K in personal belongings. Truthfully, if you were to look around your home right now, would you guess that your possessions were worth $20,000? Probably not.

Tip #4: Keep Your Inventory List Safe and Ready to Grab When Needed...

It's pertinent that you go through and make an inventory of ALL of your belongings so that you have an accurate account of what you actually own. But don't just make a list and then throw it away. That list should go somewhere safe (like a fireproof safe or safety deposit box away from the home) so that you can go right to it and refer to it if you ever need it.

Tip #5: Understanding That Your Typical Coverage May Not Cover Everything and What To Do About That ...

You may need to purchase extra coverage for some of your items. With most insurance policies, there will be a cap placed on some of your belongings of higher value. In other words, the insurance will only cover some things up to a certain amount.

For instance, jewelry and electronics almost certainly have a cap. Therefore, if you have a piece of jewelry that's worth much more than that and you want it covered, you'll have to have “special” insurance to cover the additional costs.

Another example would be a firearm. Your renter's insurance may only cover up to a certain amount for firearms. However, if you have an old World War 2 antique firearm worth much more than what's covered by your renter's insurance, you'll need to add extra or special insurance for that firearm.

The entire idea is to make sure that you're always fully covered for your item's entire value.

Tip #6: Getting Paid for Living Expenses If Displaced...

One of the overlooked parts – yet perhaps the part of renter's insurance that might come in the most handy someday – is the “Loss of Use” element of your renter's insurance coverage. This coverage pays for things such as hotel bills, temporary rent payments and deposits if you happen to get displaced while your property is being fixed or replaced.

With loss of use you'll have to be aware of whether or not you're covered up to a specific dollar amount, or if you're covered for a certain amount of time.

Tip #7: Understand Which Type of Coverage Is Best to Purchase...

There are basically two types of renter's insurance plans you can purchase. These are Actual Cash Value (ACV) and Replacement Value (RV)...

Here's the difference: When you have something that's damaged, ACV will take into account the depreciation and usage of your items. In other words, you're not truly going to get back the value of what it will cost to go out and buy a brand new item. However, with RV insurance, that's exactly what you'll get...the amount it costs you to go buy a new item today.

These are two different types of renter's insurance and there will be a different premium for each. Typically the RV will be more expensive simply because the insurance company will have to pay out more if there's a claim.

So there you go, you should now have a much better understanding of renter's insurance and all that's involved.

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