Renters Insurance Info

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Home What is Renter's Insurance? Why is apartment renters insurance important?

Why is apartment renters insurance important?

Apartment dwellers might not be required to carry their own apartment renters insurance, but this tiny monthly saving could cost the renter thousands in the event of a disaster. The landlord's insurance will not cover anything owned by the lessee, and in order to replace his goods after loss or damage, the renter will either have to pay out of pocket or to turn to his own apartment renters insurance policy.

According to 2008 data from the National Multi-Housing Council, 32% of those in the United States rented their dwelling, and of those 32%, 44% lived in apartments, with another 19% in smaller multi-family housing (2 – 4 units). The data also showed that the majority of apartment renters grossed under $50,000 annually. This results in lower incomes with less room for additional expenses. The Independent Insurance Agents & Brokers of America (IIABA) showed that 64.4% of renters did not have insurance, and most cited the cost as their main barrier. An Allstate study noted that the average renter only paid $15 - $20 per month in premiums. This amount can vary depending upon the company issuing the policy, deductible amounts, coverage, and whether it pays replacement or cash value for the property.

Apartment dwellers can save money on their apartment renters insurance and still protect their possessions. Opting for broad coverage rather than comprehensive will lower the costs, but it will cover the most common causes of loss: fire, theft, flooding from plumbing, lightening, and power surges. A comprehensive policy will offer more coverage for all events unless expressly excluded, but these come at a slightly higher price. Increasing the deductible will result in a higher price paid out of pocket in case of a disaster, but it will lower the monthly premiums. Apartment dwellers should carefully weigh the highest they could pay themselves should an emergency arise when choosing their deductible level.

When it comes to paying for items lost, apartment renters insurance will cover either the depreciation (cash) value of the item, or the current market replacement value. A policy offering the replacement value is more expensive, but it will pay more when a claim is filed than a cash value policy. Cash value takes into consideration the amount originally paid for the item, and then it subtracts the depreciation value. Depending upon what a renter has in his apartment, he might prefer the more expensive replacement value payment method, especially if he owns a lot of electronics.

Apartment renters insurance should not be considered optional. Many landlords require that their tenets carry their own insurance policy, but even if that is not the case, apartment renters insurance will offer protection and peace of mind should the unexpected occur.