How Renter's Insurance Works

Contents

One of the coverages that is provided with a renter's insurance policy is for the contents of an apartment. Contents can include electronics, furniture as well as any appliances that were purchased by the insured. Insuring contents is probably the biggest part of a renter's insurance policy because that is all a renter really has in an apartment. It is important to select an amount of coverage that reflects the value of all of the possessions within the residence. Keep in mind that as possessions come and go it is important to update a renter's insurance policy when it is time for renewal.

Scheduled Items

Some items are not covered by the contents coverage of a renter's insurance policy. Items that are not covered by contents coverage need to be scheduled on a policy. When an item is scheduled it is itemized on the policy with a specific value assigned. Items that are generally scheduled on a policy can include jewelry, golf clubs and collectible coins. A good rule of thumb is if an item is small enough to fit into a safe it should probably be scheduled.

Liability

An additional coverage that is provided with a renter's insurance policy is for liability. Liability coverage is needed because there is a chance that someone could get hurt or inured while in an insured's apartment building. Liability coverage is provided to pay for medial costs as the result of injuries that are sustained. Coverage is also provided for legal costs in the event that an insured is sued as the result of an injury. Accidents can happen anywhere and it is best to have insurance especially in a person's own apartment. Keep in mind that liability coverage on a renters insurance policy usually does not coverage negligence on the part of the insured.

Deductibles

A deductible is the amount that an insured has to pay before an insurance company will pay out an a policy when there is a claim. A deductible can range anywhere from $250 to $1000 or more depending on what an insured would like to pay. When a higher deductible is selected, the premium being paid for the policy will be less. This is because a higher deductible is less an insurer needs to pay in the event of a claim when there is a loss. When a lower deductible is selected the cost of the premium will rise because the insured is not paying as much when there is a claim.

Discounts

A discount that is applied to a renter's insurance policy will lower the amount of the premium that needs to be paid. A discount can added to a policy for having protective devices such as a smoke alarm, a fire extinguisher and a dead bolt lock. An additional discount can also be given if an insured belongs to an approved group such as an alumni association. Discounts are a good way to offset any increase in premium because of coverage and deductible changes.