Life is unpredictable, and unfortunately, catastrophes happen without prior notice, so it’s always better to be safe than sorry. Many people suffer great financial losses that they cannot quickly recover from when a catastrophe strikes, and as a tenant, you might be thinking that these things would be covered by your landlord’s insurance.
However, this is not the case, and you can lose a great deal of money because of this common misconception. So, let’s take a look at how renters’ insurance can help you save your hard-earned dollars.
Why Renters’ Insurance is Worth It
The average cost of renters’ insurance is about $20 a month, and for this price, your main question will probably be about its coverage. Does rental insurance cover fire? How about burglary? What happens if I need to be relocated? Well, you can rest easy knowing the answers to your questions will be satisfactory.
Your standard renters’ insurance policies will help you cover the expenses in case of fire, windstorm, vandalism, theft, and more. And in case you want to ensure your more valuable things like expensive jewelry or electronics, you can add it to your insurance policy at an additional cost.
In case of greater damage to the property, you might need to relocate temporarily, and depending on the state where you live, this might not be covered by your landlord. In the middle of such a crisis, renters’ insurance might prove to be your best friend. It covers the relocation costs, and some policies even cover your food and laundry expenses.
Get Quotes from Multiple Companies
Different insurance companies will offer you different rates for your monthly insurance fee. It’s in your best interest to do your research and find the most affordable solution for yourself.
The coverage amount for renters’ insurance depends on the value of your personal property, and of course, if you have items of great value like fine art or expensive jewelry, your monthly fee will increase.
A typical renter has about $25,000 in personal belongings, but you might want to go a bit above this amount so that you can protect your future purchases as well. If you want to save money, you need to do your research and get quotes from your local insurance companies before you make your choice.
Deductibles Can Help Lower Coverage Costs
Choosing the right deductible is one of the most important decisions you’ll have to make when choosing your renters’ insurance policy. In case you don’t know, a deductible is the amount of money that you pay out of your own pocket when you make a claim on your insurance policy.
Basically, the idea behind this is that when you choose a deductible, you tell your insurance company how much of a risk you’re willing to cover yourself, and they give you a quote based on that. If you opt for a lower deductible, your monthly insurance fee will be higher.
Your best bet, therefore, would be to opt for a higher deductible. It is a larger investment on your part in case of catastrophe, but your monthly renters’ insurance fees will be much lower.
Renter’s liability coverage can help you cover legal costs and associated damages in case a claim is made against you, or you are sued as a result of a covered occurrence. It can help you deal with damages to other people and their property if you’re found legally responsible.
Most common situations where your renter’s liability coverage can help you are if you accidentally start a fire in your apartment or house, if your house guest gets injured on the premises, or if your child accidentally breaks the neighbor’s window.
Liability coverage usually starts at around $100,000, but you should always check with your insurance company.
Check Your Credit Score Beforehand
Many things affect the fee of your renters’ insurance, including your previous claims history, location, and maybe surprisingly, your credit score. The reason they use information about your credit score is so that they could make predictions about possible claims and prevent insurance fraud.
It’s your best bet to always be informed about your own credit score so that you can ensure that there are no errors on your credit reports that can work against you when you’re applying for renters’ insurance, and so that you can predict the possible insurance quotes you’d be offered.
Renters’ insurance is a small investment that allows you to keep a peace of mind knowing you are protected in unforeseen circumstances, and in the long run, it can help you save a ton of money.