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How Much Renters Insurance Do I Need
First let's summarize the elements of a quote or areas of coverage provided by the average renter insurance product:
- Personal Property / Contents Cover
- Personal Liability Insurance
- Loss of Use/Additional Living Expense
- Guest Medical Payments
The dollar figure that you choose for Personal Property protection is known as the policy limit, the maximum sum that the insurer may payout in the event of loss. The standard approach to figuring what this amount should be is to estimate the total replacement cost of all your belongings.
Now to do this literally would be time consuming. You may encounter a how much renters insurance do I need calculator to help you estimate. In reality, such tools to help estimate how much renters insurance do I need are invariably sales tactics designed to draw you into a quote process. There is free software available from the Insurance Information Institute (iii) that can help you take inventory and other free check sheets, but these can be cumbersome.
A simplified approach is to think about the combined replacement cost of all your belongings when categorized. The important thing is to recognize how the value of all your stuff can add up, often to a surprising sum. For example:
- Computing Equipment
- Sporting Goods
- Outdoor Items (e.g. BBQ, hoses, garden items)
The idea is to arrive at an estimate of the grand total replacement cost assuming that all was lost in a fire. If you habitually keep items in your auto, these should also be included (e.g. tools) since personal items lost from a vehicle are not covered under auto policies.
What And How Much Renters Insurance Do I Need
Deciding on the principal coverage amount or policy limit is not the only consideration. How much renters insurance do I need and what approach do I require for personal property insurance are equally important.
Other important decisions relating to coverage for Personal Property:
1. Cash Value Or Replacement
The default approach is to offer settlement for personal property claims on a depreciated cash value basis, not actually the full replacement cost as you have estimated the value of your items to be. Having an endorsement added to your policy can shift this default settlement method over to the preferable Replacement Cost settlement approach. While your quote will increase (e.g. 15%) the benefit should outweigh the cost.
2. Losses Away From The Rental/Off Premises Cover
Some policies place limitation on the dollar amount that may be paid out (claimed) for items stolen or damaged when away from your apartment or rented accommodation. If you travel frequently or have cause to carry valuable items in your vehicle for example, then you should pay attention to the terms surrounding off premises coverage settlements.
The default or standard approach for personal property coverage is to offer 'Unscheduled Personal Property' cover. How much renters insurance do I need for contents should consider the need for scheduling. How much renters insurance do I need in calculating the total replacement cost of all your items fails to account for the fact that renter claims for personal property loss are subject to limitations, within the aggregate total coverage amount provided as 'Unscheduled Personal Property' coverage.
In the event of a loss, insurers categorize the items that you claim for by type (similar to the categories shown above) and dollar category claim limits exist. For example, jewelry is subject to a maximum payout. In addition to category limits, some categories also have per-item claim or potential settlement limits. How much rental insurance do I need for personal property should thus consider whether there is a need to have certain items scheduled for additional premium quote cost or for any extended coverage.
Personal Liability Insurance
How much renters insurance do I need for liability? Quotes for renter policies include liability cover. How much renters insurance do I need for personal liability depends on your lifestyle and how much assets you have to protect. The typical renter product offer $100,000 cover by default.
For many renters this figure is adequate, but some renters may require more. If you have significant financial assets that could be called upon in the event of a liability judgment against you, you may wish to buy increased liability protection. Perhaps you rent a substantial property and entertain visitors frequently; in such case you might consider a quote for a higher limit.
Loss of Use
Loss of use covers you if you are unable to live in the rental accommodation due to a covered loss scenario. This coverage is normally offered as a percentage of the policy limit. In some areas (e.g. NYC) the expenses involved in temporarily living elsewhere (e.g. hotel) may quickly exhaust the default coverage amount. If you live in an expensive area, how much renters insurance do I need might require you to pay closer attention to the terms of loss of use cover.
Best Quotes For Renters
Find carriers offering quality renter protection in your area. Quotes for renter policies are generally cheap and affordable yet it still pays to shop quotes from a few good carriers found. Several free quotes should be obtained before renewal of any existing policy in addition to those purchasing for the first time. The cost of quotes and premiums is dependent on many factors, but the location of the rental and coverage amount for personal property are most important factors that form the basis of the rating system used by insurers. Quotes for the same coverage can differ significantly from one insurer to the next as a result of base rate competitiveness. Make sure to periodically review the amount of coverage required to ensure it accurately reflects the value of belongings. Be aware that while some quotes may offer renters the favorable replacement cost settlement approach as standard (without the need for endorsement) this does not necessarily reflect the cheapest approach to obtaining such coverage. It can be cheaper to find a good value standard product from a carrier with a favorable rating and add the replacement cost endorsement. In addition to the price of quotes when contemplating how much renters insurance do I need, you may also wish to consider carrier quality. How the insurer rates in terms of claims satisfaction and customer service are important considerations for some. Find companies offering renter coverage in your state here, collect free direct quotes and see how much you can save.