Renter’s Insurance: What’s the Deal?

Alright, so you’ve signed the lease for your dream place using LeasingKC.com (a shameless plug, we know) but what’s next? Renters insurance is probably something you don’t think about until you need it, but it’s worth getting a policy started by your move-in date, and actually most apartment communities or landlords require you to have it. You may be thinking, what the heck is it and why is it important? We find this is an all too common question amongst the leasing community, so we decided to write this post to help you out.

So what is renter’s insurance and what does it cover?

Renters insurance covers a few different things: your belongings, your cost of living, and liability risks in the case of an emergency. Some of the basic coverages in your policy include, but are not limited to, fire or lightning, freezing of plumbing, wind or hail, and theft or vandalism. Also worth mentioning, your policy doesn’t cover the building, dwelling, or structure you are living in, the owner has an insurance policy for that.

Who needs it?

Renters insurance is great for anyone and everyone who is renting.

Why is it important?

If you are a renter and you have a fire in your apartment, someone steals something, or someone gets hurt on your property, unfortunately you will have no coverage and you will have to pay out-of-pocket for the damage.

What kind of coverage is needed?

This will be different for each person and coverage options can vary between insurance companies so make sure you discuss your options with your agent. One thing that you will need to know is the cost of all your belongings. As a renter, the average range will be between $10,000 – 30,000. The number doesn’t need to be exact. The easiest way to do this is to first write out a list of your large items and categorize items like electronics, clothing, furniture, etc. Then, put an estimated value next to each category or item and total up the values. For silverware, jewelry, furs, firearms, and other similar items, there is a limit put on your policy, so be sure to pay attention to the value of these items and make sure you would be completely covered in the event of a loss.

Another coverage type you will need to decide on is whether you want replacement cost or actual cash value (ACV). This only comes into effect when you have a claim on your policy. In the event of a loss, you will either get full replacement cost of your belongings or actual cash value. Actual cash value is the cheaper option, but the insurance company will pay out at the current value of an item, taking depreciation into account. Replacement cost is more expensive but it will pay out the value to replace your items or their cost when you purchased them.

The third major coverage you will need to decide is your liability coverage. The most common options are $100,000, $300,000, $500,000, and $1,000,000. This coverage amount protects you if someone gets hurt on your property or if you damage someone else’s property.

Then choose your deductible amount. The most common options are $500 or $1000. This is the amount you pay up to in the event of a loss. The lower your deductible the higher your premium is and the higher your deductible the lower your premium is.

What’s the cost for something like this?

The cost for a renters insurance policy can range anywhere from $140 – $220 in premium per year. Your insurance provider should allow you to either pay it in full or pay it monthly.

When should I get a policy and how long does it cover me for?

You should get a policy to start the day you move into your new place and it will cover you for one year. Once a year is up, then it’s time to renew it!

This all may seem overwhelming, especially while you’re trying to move. However,  if you talk to your insurance agent, he or she will be able to help you through the whole process!

*Please note that we are not licensed insurance agents. Please contact your insurance agent for more details about your renters insurance policy. Thank you!