Renters insurance can be confusing, to say the least. Here's a renters insurance FAQ that explains the basics of renters insurance in simple terms.
Why do I need renters insurance?
Natural disasters like floods and hurricanes are on the rise, theft and vandalism are increasing, and if you don't have renters insurance you could lose everything you own.
Many renters think their landlord's insurance will cover damages to their personal possessions, but it won't. Your landlord's insurance only covers the building you live in.
What does renters insurance cover?
Renters insurance provides three basic areas of coverage:
Personal property coverage pays to replace your possessions when they're damaged by fire, vandalism, and storms, or when they're stolen.
Loss-of-use coverage pays your hotel and restaurant bills when your residence is being repaired due to damage by fire, vandalism, or storms, and you need temporary living quarters.
Personal liability coverage pays for another person's medical bills and property repair bills when you, your family, or your pet are found responsible for injuring them or damaging their property. It also covers your legal fees if you're sued.
What's not covered?
Renters insurance does not cover damage caused by earthquakes or flooding. There are also limits on coverage for expensive items like jewelry, silverware, furs, antiques, and computers. If you live in an earthquake or flood zone, or have expensive items that aren't fully covered, you can purchase additional insurance.
How much coverage do I need?
You need enough personal property coverage to pay for all your possessions if they're destroyed, and enough liability insurance to cover all your assets if your sued. Take an inventory of your possessions and use the total value as your coverage amount. Then total your assets - bank accounts, stocks, bond, CDs, etc. - and make sure you have enough coverage to protect them.
How much does renters insurance cost?
Renters insurance is cheap. It can cost as little as $16 a month for $20,000 worth of personal property coverage with $300,000 liability coverage. That's less than the cost of a music CD to insure all your personal property and all your assets are protected.
Where can I get cheap renters insurance?
The best place to get cheap renters insurance is at an online insurance comparison website. These sites let you get quotes from different companies by filling out a simple questionnaire with information about your residence and the amount of insurance you want. The best of these sites feature a service whereby you can talk with an insurance expert and get answers to your renters insurance questions for free. (See link below.)