I received a phone call last week from a woman who was referred to me by a mutual friend. She’s relocating to Dallas after going through a divorce. She’d rented an apartment and needed renters and car insurance. We talked about what she owned for her quote, and she asked me a question I thought was interesting; would she really need renters insurance if the complex didn’t require it as a condition of her lease?
I believe renter’s insurance is important, whether you’re a recent college grad or someone who’s established and have accumulated some things. The two reasons are to protect you and your personal property from the cost of a loss such as a burglary or fire, as well as a liability loss.
Property Coverage: This portion of the renter’s insurance policy protects a renter’s clothing, furniture, electronics, kitchenware, decorative items, against various types of loss. How much coverage is needed is determined by the renter, but it should be enough to replace what is owned. If you own a nice jewelry, musical instruments, computers, tablets, and other electronics, then these items should be scheduled.
Liability Coverage: Liability coverage protects a renter when someone comes onto their property, invited or not, is hurt, and sues for negligence. This includes someone falling in your apartment due to tripping on any furniture or an area rug, a dog bite, or other things where you could be determined to be negligent. Coverage typically ranges from $100,000 to $500,000.
In addition to personal liability, medical coverage is available to help in an instance where someone is hurt on your property. Coverage amounts usually start at $1,000 and go up to a maximum of $5,000.
Cost Factors: The two main items that determine how much a renter’s policy costs is the amount of coverage on your personal property and the level of the policy’s deductible. The more coverage a person has, the higher the cost, while a lower amount of personal property coverage results in a lower policy cost.
The policy deductible works in a reverse manner. The higher the deductible, the lower the cost while a lower deductible results in a higher premium for the renter’s insurance policy. The policy deductible is what the renter is responsible for first, before the policy pays for the loss and usually come in dollar amounts ranging from $100 to $1,000.
Discounts also impact the cost of renter’s insurance. If you purchase a renter’s policy with your car insurance, you may get a discount on both policies. Whether small or large, every little bit helps!
As to why it’s important to have renters insurance, there have been a number of apartment fires in Dallas over the last 18 months destroying over 150 units. Those without renter’s insurance were forced to replace furniture, clothing, and all their property on their own while those with insurance were able to cover or lessen their financial loss due to renters insurance. Do you have a question, comment, or experience you’d like to share? Share them with me on our Google +, Facebook, and LinkedIn pages. I’d love to hear from you!