Renters Insurance - Are You One of the 52,000,000 Without It?

Let's face it, the idea of losing everything - starting over with absolutely nothing isn't something you or I ever want to face. But if you are a renter and don't have renters insurance, you stand a chance of this worst nightmare happening to you.

Look, over 81,000,000 Americans rent in the U.S. and approximately 64 percent do not have renters insurance. In others words, 64 percent of renters have never asked themselves "What's the worst thing that could happen to my personal property in the place I rent and am I willing to accept the risk of it happening to me?"

By the way, I am not an insurance agent! If you are expecting a sales pitch - trying to get you to buy renters insurance from an insurance company I represent, you won't find it here.This is about sharing with you the knowledge I gained from shopping for renters insurance.

What Renters Insurance Will Do For You

In case of theft or many types of damage, renters insurance will cover your personal belongings up to the amount of your policy. It can also provide you with liability protection (in case a visitor gets injured) and even temporary living expenses.

Do You Really Need Renters Insurance

That depends. If your personal property consists of a TV, DVD player and some everyday clothes the answer is NO. If you have expensirve clothes and/or furniture, jewelry, collectibles, a broad array of electronics or other significant personal property then you should definitely consider it.

Lets say you have personal property of approximately $10,000 in value (the smallest policy many companies consider). Without renters insurance, you are underwriting your own "insurance policy" by default with no coverage and a $10,000 deductible. Are you ready for that?

What Renters Insurance Will Cover (And Not Cover)

In general, a standard renters insurance policy will cover losses from:

fire or lightening; theft, vandalism; windstorm or hail; explosion; collapse of building; glass breakage; falling objects; smoke (in some cases); weight of ice, snow or sleet; plus other lesser occuring incidents.

Another benefit of renters insurance is the liability insurance you receive for protection against claims caused by unintentional acts committed by you, your family members and/or pets. $25,000 is a common basic amount but most offer coverage of $50,000 or $100,000 for a small additional charge.

What Is Not Covered

Standard renters insurance policies do not cover damage or loss from some natural disasters such as earthquakes and floods. In fact, most types of water-related losses are not covered by a standard policy. Also, loss of pets such as animals, birds or fish are usually not covered under a standard policy. Carefully review the "Losses Not Insured" section of any renters insurance you are considering buying.

What A Typical Renters Insurance Policy Will Cost You

What you pay for a renters insurance policy depends on a number of factors. Things such as policy size ($10,000 - $40,000), the amount of deductible you choose, if you want actual or replacement cost of your possessions in case of loss, where you live (urban, suburban, rural), how disaster-prone your area is, etc.

According to one major insurer, the average annual cost of a renters insurance policy premium is $195.00

My Renters Insurance Policy

My policies included covered losses up to $40,000 with Loss Of Use at $8,000, Personal Liability of $100,000 and Medical Payment to Others at $1000. This was for Replacement Cost (not depreciated current market value). Deductible was $500.

I received discounts for being over 50, a non-smoker, having my auto insurance with the same company and home security devices (smoke alarms, deadbolts). This coverage cost me less than $200 per year.

What Are Some Renters Insurance "Gotchas"

You can reduce (or eliminate) most "gotchas" by simply reading and understanding your policy's coverage.

There are specific limits on what you will receive for losses of certain personal property such as cash, coins, jewelry, computer systems, silverware, collectibles and so on. Check what these limits are and get extra coverage if needed.

Most types of water damage are not covered with a standard renters insurance policy. Understanding what water damage is and isn't covered is important. If this is of concern to you, get flood insurance or check on extra water damage coverage.

Choose a reasonable deductible amount - one you can live with. It's nice to be able to reduce your premium cost by going with a high deductible but make sure you can afford it in case of a loss. The most common deductible amounts are $250 and $500.

You must have some sort of proof for your loss claims. If someone broke into your place and "cleaned you out", insurance companies aren't going to take just your word for what you lost. Good, solid proof of ownership is necessary in order for your insurance company to pay you for your losses.

What You Should Do Next

If you haven't already, this is probably a good time to take an inventory of personal property. It will help determine if you need renters insurance and, if so, what size policy to get. $10,000 is usually the minimum with $40,000 the standard maximum. Don't make a chore out of this. Take a few days, if necessary, to compile your list adding to it as you think of more items.

If the value of your personal property is enough to deserve insurance, you will want to gather proof of ownership for each significant piece of personal property. Proof of ownership can be established with credit card statements showing purchases, purchase receipts, photographs, a video inventory and/or owners manuals with makes, models, serial numbers, etc filled in. Keep a copy of your proofs offsite.

Shopping For Renters Insurance

Now that you have your list of personal property items and their approximate value, it's time to go shopping. Here are some questions to consider as you shop for the best policy for you.

What are the coverage limits for cash, computers, jewelry, coins, furs, silverware, camera equipment, firearms, TVs, iPods, other electronics, (assuming you own/have some of these)?

If you have collectibles, what are the coverage limits for your type of collectible items (stamps, baseball cards, figurines, etc.)?

What is the additional cost for replacement coverage (highly recommended) versus being paid the actual cash value (the depreciated value) of your damaged or stolen property?

Is your personal property that is stored in a garage or off-site storage unit covered? If so, what are the coverage limits?

If you have one or more roommates, is their personal property covered by your renters insurance policy?

Is business property or loss of business use covered by renters insurance (if you run a business out of your rental "home")?

If a guest of yours has an item damaged or stolen while staying or visiting you, is the item covered?

What happens to your coverage if you move to another rental unit (what do they require)? Is your personal property covered while moving to another rental unit?

If you have a claim, what proof do they require? Is there a limit on the number of claims you can make? Will the premium go up?

Does the policy allow for medical payments for people injured in your rental unit or as a result of your actions - on-site or off-site (this is different from liability coverage)?

Besides the standard renters insurance coverage, what other coverage options are available and what is the cost of each?

This is not a complete list of renters insurance questions you will want to get answers for but it covers some key elements that you may not have thought of.

Final Note: Some states have specific requirements of companies offering insurance to residents. You can find a link to your state's insurance dept. at //www.InsureUonline.org to find out more.