How to Buy Renters Insurance

A common response from many apartment renters is "Why should I buy renters insurance, it's the landlord's problem if anything happens to the building." What is not understood is that renters are responsible for insuring personal items destroyed in a fire, vandalism, theft or other circumstances.

The replacement cost of computers, pda's, tv's, ipods, stereo's, clothes, shoes, furniture and other belongings can quickly add up to many thousands of dollars which could quickly disappear. An easy and inexpensive way to avoid financial loss from a minor mishap to a major disaster is to buy renters insurance.

Difficulty: Easy

Instructions

1. Consider Cost - An average cost to buy renters insurance is about $200-$300 per year depending on deductible, apartment location and dollar amount insured. The best price can be found for your particular situation by contacting insurance brokers or requesting quotes online.

2. Choose Type of Property Coverage - Two forms of renters insurance are available to buy.
   
   "Actual cash value" renters insurance policies pay what the item is considered to be worth at the time of the loss (you might get $200 for the laptop you bought 5 years ago for $800).
   
   "Replacement cost" renters insurance policies pay what it would cost to replace the lost item with an equivalent one (the $800 dollar laptop would be replaced with a new similar laptop the insurance company would decide on).
   
   Because "Replacement Cost" policies will pay out more than "Actual cash value" policies, expect to pay a higher premium.

3. Know Other Losses are Covered - Most renters insurance policies cover more than just property.
   
   If the renter is displaced from the apartment for covered events, living expenses will be covered.
   
   Liability coverage is included with most policies. If someone should get hurt while visiting the apartment and sues the renter, the liability coverage will pay costs up to the limit in the policy.

4. Control the Cost - Certain situations will effect the cost of renters insurance you buy .
   
   Ask for a discount when shopping for insurance if your building has a security system or 24 hour doorman.
   
   Dogs may increase the cost due to higher liability issues.

5. As with most types of insurance, the chances of ever having to make a claim are slim. But considering the low cost and potential payout, the decision to buy renters insurance should be one of the first things on the "To Do" list after signing the lease.