If you are currently renting an apartment, one of the things that you should have is renters insurance. Many people don't have renters insurance because they don't understand what it is and why they should have it, which can lead to a very costly mistake if the need arises. Here are three questions about renters insurance you should know the answers to.
What Situations Does Renters Insurance Provide Coverage For?
Renters insurance can protect your belongings in a variety of different situations. If there is a fire in the building that causes all your belongings to be damaged, renters insurance will pay to have things replaced. If someone breaks into your apartment and steals things, you'll also be covered. Just be aware that renters insurance may not cover all incidents, so it's worth taking your time to understand the policy. For example, renters insurance may cover flood damage and earthquakes by default or require you to purchase additional insurance.
Where Must Belongings Be to Receive Coverage?
It is possible that you wrongfully assume that all of your belongings will only be covered if they are in your apartment at the time they are stolen or damaged. Renters insurance policies actually cover your belongings in general rather than your belongings if they are in a specific location. This means that you may have coverage for items that are stolen from you outside your home, such as if your smartphone was stolen from you.
Some other examples of situations that renters insurance may cover is if your luggage is lost or stolen at the airport or if your laptop is damaged because you dropped it. Of course, you will need to pay a deductible in order to use insurance, and it should be less than what it costs to replace the items to make it worth it.
Is A Replacement Value Policy Worth It?
There are replacement-value and actual cash-value policies that you can purchase to cover your personal property. Cash value policies are often much cheaper than the replacement value policy, and for a good reason. Cash value policies will pay to replace damaged or lost items at the value they are worth today. For example, if your smartphone was stolen with a cash-value policy, you will only be paid the value of the phone is worth today, which may be something like $50 to $100. However, a replacement value policy will give you the money to buy a new phone at today's prices.
For more information on renters insurance, contact a local insurance company.
