“Renters insurance is too expensive,” “My possessions aren’t worth that much,” and “The home is already insured, right?” These are some of the common misconceptions. While including renters insurance in leases is an effective way to cover everybody in the event of a property loss, the concept can at times be hard for residents to swallow.
Calculating Coverage
The value of possessions alone may be an eye-opener. The average renter has $10,000-$50,000 in personal property. The average renter’s insurance policy costs $15-$30 per month, far less expensive than replacing personal property or being legally responsible for an accident.
An important consideration is for the tenant to purchase personal contents so their possessions are covered as well as their additional living expenses, which helps to cover meals and hotel expenses in the event they are ever displaced.
When considering the benefits of renter’s insurance, keep these points in mind:
Residents can calculate the value of their possessions using online tools
Most insurance providers have online calculators that help determine the actual cash value or replacement cost of personal possessions. Most people think only their TVs or electronics are their most valuable possessions, but items like furniture, bedding, jewelry, appliances, clothing, and tools can also add up. Completing an online calculation takes only a few minutes and gives the tenant a good baseline for coverage. Also, tenants should make sure the policy includes theft and not just burglary.
Choosing a deductible
Most deductibles range from $250 to $1,000. The higher the deductible, the lower the premium.
Liability coverage
Liability coverage includes bodily injury, medical payments to others and property damage to others, and is relatively inexpensive. The homeowner’s policy is for structural damage to the home. Even though the policy might cover damage by tenants, it does not protect the resident from being liable for damages caused like a kitchen fire or busted water pipe while hooking up the ice maker.
Consider optional coverages, like increased medical payments to others
In most cases, the tenant can purchase additional coverage that will pay for expenses that exceed normal liability limits, like medical payments. Medical payments, which can become extremely costly, for guests injured in the tenant’s home will be covered.
Tenants should document their personal belongings being insured
A high percentage of Americans don’t have a home inventory of their possessions, which put them at risk of inadequate home insurance coverage. It’s important to have receipts and photos of personal property and a backup copy of the inventory outside your home. Tenants should document their possessions and remember to keep an updated list. In the event of a loss, this information will come in handy when working with your insurance company.