What Renters Insurance Is
We have seen the image countless times on the news: An apartment building going up in flames, the tenants lefts without anything but the clothes on their back, and if they are lucky their lives. It is a sad scene that plays out far too many times. Some of the unfortunate tenants who are victims of fires like this will find at least some silver lining in the financial support they receive for their losses through renters insurance policies they had in place.
However, more than half of all renters do not have insurance of any kind. This is usually to either a perceived notion that renters insurance cost isn’t affordable, but most often it is simply because people do not know that such a thing as renters insurance even exists or that insurance companies offer this coverage just as they do with other types like auto insurance or health coverage. Snyder Insurance and Financial Services want to help you learn more about renters coverage.
“The average renters’ insurance in the U.S. is about $200 annually,” said Loretta Worters, a spokeswoman for the Insurance Information Institute.
She went on to say that any people who know about renter’s insurance and who can afford it do not buy it because they are under the mistaken impression that the landlord is the one responsible for any of their losses.
This is not the case and in almost all losses, it is the tenant who is responsible for the insurance, not the landlord. All belongings in the apartment have to be covered and insured by the tenant. And the value of those belongings will quickly add up, especially on things related to the technology we use today: phones, computers, laptops, flat screens, video game systems, and so forth!
Here Are A Few Things You Should Know About Renters Insurance
What’s the real cost? An annual average is usually around $200 for renters insurance cost, but that can fluctuate based on several factors, just as any insurance plan will. Main factors to look into are location, age of the apartment, the safety and condition of the apartment, your own financial stability, the value of your belongings, and how long you plan to be at the specific apartment for.
Two forms of coverage typically are available to most renters. Policies usually cover an “actual cash value” or a “replacement value” of all items that are filed as lost or damaged when you file a claim. Here are the key differences in these two coverage types:
- Actual cash value policies give you the cash value of your item- if you just bought a $700 flat screen and lost it in an apartment fire they would give you $700 for it. If that purchase was made three years ago you will get less because that flat screen is worth less now if you were to sell it because it is an older model and you may get around $400-$500 for it.
- Replacement cost renters insurance will pay out the equivalent cost that you would put out to replace the item. So that a $700 flat screen would actually likely get you more with a replacement cost because the same size flat screen may actually cost more now. At the very least you are pretty much guaranteed to get back what you initially paid for the item. Such coverage, due to the fact they give you a higher payout, carries a much higher premium and will cost you more per year.
Beyond property. Most renters insurance policies also offer additional add-ons you should consider. One is living expense coverage, which gives you a pay out in the event you lose your home and will pay for a place for you to stay for a set amount of time until you can secure a new place to live. Other policy features include liability insurance. If someone is in your apartment and slips on a rug, falls, and breaks their arm, you could be held liable for their medical expenses and this insurance policy helps cover any such cases.
Other cost issues. You should also look at things that may raise or lower your premium coverage expenses. Having a security system in your apartment, smoke alarms, and other safety features can help lower the cost. Having a window with a broken lock or no easy access to a fire escape route may raise your rates. Talk to your policy holder to see what can be done to help adjust your premium rates.
Renters insurance is a safety net you do not want to forgo. So be sure to check into it and see how much a little extra each month could save you in the long run if you end up being the one on TV watching your apartment and everything in it go up in smoke.
Snyder Insurance and Financial Services is a full service independent insurance agency that has proudly served the Chicago area for over 30 years. Our portfolio offers our clients over forty of the finest and most financially secure companies in the industry. With twenty-plus highly trained professionals on our team, we can customize these products and services to meet the unique needs of every client.
Call us at (630) 960-4848 or use our Contact Page to learn how we can serve you.