I bought a renters insurance policy when I moved into my first apartment after college, and I've since become a sort of evangelist for the cause. It's so cheap and easy to protect all of your belongings from theft, fire, and water damage, yet even most of the long-term renters I know still don't have insurance. (Note: Policies do not cover natural disasters like earthquakes.)
Even if your most prized possessions seem frivolous — a $400 pair of shoes, a snow globe collection —that doesn’t mean you don’t deserve to have them replaced. Learn the five things you need to know about renters insurance after the jump.
- Getting a policy is incredibly easy. You can go online to obtain quotes from most providers, including State Farm, AAA, and Geico, then follow up with an in-person meeting to do the paperwork. The whole thing takes less than an hour.
- It's also incredibly cheap: if you're a single or cohabitating apartment-dweller, your rate will probably be between $200 and $350 a year. That's about $30 a month or less.
- A policy insures your stuff, not your place. If your landlord has insurance on the building, it won't do you any good if you lose your possessions in a fire. But since it's not tied to a specific apartment, it's easy to transfer the policy when you move.
- There are two ways to get reimbursed. You can opt for actual cash value coverage, which pays out according to the current value of the lost items, or replacement cost coverage, which considers how much it would cost to replace all of your possessions if you bought them brand new.
- Use photos to itemize. A renters policy isn't itemized; it covers a lump sum based on the estimated worth of your possessions. So you should also take photos of the items covered by your policy and keep them somewhere safe besides your house. That way, if something does happen, you’ll have proof to show the insurance company.
Do you have renter's insurance? Share your insights below.