Insurance Coverage for Renters

Most insurance companies will encourage renter's insurance for anyone who rents. Insurance coverage for renters is similar to homeowner's insurance, providing coverage for those who rent rather than own their homes. It gives you peace of mind if there is a fire, vandalism or theft. Nevertheless, if you don't have very much value in your total household goods, renter's insurance may not necessarily be for you. But, if a particular item has enough value to warrant its replacement, such as a laptop computer that is needed for school, then renter's insurance might be something to consider.

It is always important to shop around for the best quotes on renter's insurance, keeping in mind that you want to deal with a quality insurance company. Not all insurance companies are created equal. It's a smart idea for you to get some feedback from those who have used a particular insurance company by asking friends for referrals or checking with the Better Business Bureau for complaints. Pay particular attention to how good various insurance companies are at expediting claims.

Who needs renter's insurance?
Not all renters require coverage. To figure out your needs, take stock of your possessions and monthly income, then imagine a worst-case scenario, such as a fire or flood that destroys your belongings. You'll not only be out of a home, but you'll also have no furniture for a new one. If replacing your furniture and clothing would represent a significant financial burden, look for a low-cost policy that will provide the money to help you get back on your feet.

If you own a lot of nice furniture, electronics, artwork or other valuables, a renter's insurance policy is a good idea. Be sure to document all of the contents of your apartment with photographs or video that you store in a safe location. This will make it easier to file a claim, if needed. Get professional appraisals for items of exceptional value.

If you have only a few items of value, such as artwork or a collection of baseball cards, it may be cheaper to simply insure those items. Specialized policies for these items may be a good idea even if you have renter's insurance because renter's policies are often limited in the coverage provided for items that have collector value.

If you have significant financial assets, renter's insurance can be a valuable way to protect you from liability lawsuits that can arise if someone is injured in your home.

What affects the costs?
Probably the most important factor that will affect your renter's insurance is the same factor that affects homeowner's insurance-location, location, location. If you live in a high-crime area or an older neighborhood with close-set buildings and a high risk of fire, you will pay a higher premium.

Renter's insurance will also be affected by your claim history. If you have had two claims turned in within the past three years, this may need to be reviewed by an underwriter and could disqualify you, since you are a higher risk to the insurance company. Owning a pet that has bitten someone might also disqualify you. Running a business from your residence can also disqualify you, as a business may add a significant risk of fire or injury to others, depending on the industry.

How to reduce premiums
There are ways to reduce your renter's insurance. If you have a security system or you live in a gated community with a security guard monitoring the entrance, let the insurance company know so they can factor in this benefit.

Another way to reduce your insurance is to ask them to evaluate the different deductibles that they offer to help reduce the monthly payments. Keep in mind that you will have to pay out of pocket to cover that deductible, so make sure you have the money saved for an emergency.

In Florida, there is a state law that allows renters and even homeowners to reduce their insurance through a mitigation procedure. There are mitigation forms that renters can fill out and submit to their insurance company. A building inspector will then come out, inspect the building and the household goods and determine if any further reductions can take place. Check with your state to see if a similar provision exists.

Membership in professional and affinity groups may qualify you for discounted premiums. In general, you'll also qualify for discounts by having all of your insurance with a single company, such as car insurance and renter's insurance.

As you're comparing premiums, be sure to compare the underlying policies as well. Not all renter's policies provide the same level of coverage. Some companies will insure items that you put in storage while others won't.

If you live in a designated flood area, renter's insurance won't cover water damage, so you'll need to get insurance through the National Flood Insurance Program. Other environmental hazards, such as earthquakes or forest fires, may not be covered in high-risk areas. Be sure to find out if you'll need this additional coverage.