Renters’ Insurance 101

HO-4 This is the type of policy you buy if you are renting. It covers your possessions and usually provides living expenses in the event your home becomes uninhabitable. Like any homeowner’s policy, coverage for earthquakes and floods has to be added, if you want it. Other than that, this is a fairly comprehensive policy covering many types of possible event. Some landlords require proof of insurance before they will rent to a tenant.

This is one of the cheapest types of insurance and it’s surprising more people don’t invest in it. If you’re a renter, don’t shrug off the idea of renters’ insurance because you think you don’t have anything worth insuring. If you suddenly had to replace all the contents of your home you might realize that, while you might not own things of any particular value, all of them together probably add up to a chunk of change. If you don’t believe it, make a household inventory of everything you own (it’s a good idea in any case). If you remember the purchase price of things (do keep your receipts in future), write it down, otherwise just list what such an item would cost to replace. Don’t just count the big, obvious stuff. It’s the little stuff that really adds up. You don’t have to list every separate pair of socks, though. But you should know what a dozen pairs should cost, right?

When you’ve finished, add it all up. See, you would have a hard time replacing everything. Now, call your insurance agent and ask for a quote. A number of factors will be considered, for instance, the safety of your building. Are there any security features, and what are they? Does the building have a fire-sprinkler system? Are you by any chance in a high-crime zone? Have you ever been burgled? (Is there a police report and/or did you make an insurance claim). Do you have any extremely valuable items? Those would have to be insured separately. And, if you want earthquake or flood coverage, that would also be separate. But if your building burned and all your stuff was ruined, not only would you be able to replace your stuff, you might also be put up in a hotel temporarily, and given money to buy meals with. That’s a lot better than sleeping on a friend’s couch for the duration—especially if you have a family.

Renters’ Insurance is starting to look better and better, isn’t it?

Now, about that roommate………. It is possible to buy a policy for several unrelated occupants but you may feel better with a policy that protects you, your guests and your things. Check it out with your agent.

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