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10 Questions to Ask Before Buying Renters' Insurance

Asking the right questions before buying renters' insurance can help you utilize the policy to your advantage. Read this piece to know the questions to ask before buying renters' insurance.
WealthHow Staff
Last Updated: Apr 9, 2018
Renters' Insurance Tip
Check if the area where you are renting an apartment has a history of thefts. There are chances that it has increased the cost of your policy.
Many people do not feel the need to buy renters' insurance if their landlord has insured the premises. However, you must understand that a renter is liable to pay for anything that happens on the rented premises, and hence it is always good to have it covered under renters' insurance. It will protect your personal belongings from risks like damage and theft, and also cover your temporary expenses if/when you are needed to stay elsewhere during the time your apartment is under repair. One of the key benefits of getting renters' insurance is that it covers personal liability. However, you must have complete knowledge about the insurance scheme so as to be able to utilize it for your benefit. This WealthHow article gives you ten questions to ask before buying renters' insurance.
Do I really need a renters' insurance policy when my landlord has one?
Many people do not understand the importance of getting a renters' policy because they think that the landlord's insurance has them covered. Remember, your landlord's insurance covers the structure of the building and does not extend to your personal belongings or your individual liability. If any of your personal belongings like electronic gadgets, furniture, or other appliances are damaged or stolen, the renters' insurance will help you get a reimbursement or replacement of the same. If you happen to injure a person in your rented residence or damage his possessions, renters' insurance will help you get coverage for the same. Additionally, it may also cover the costs incurred for legal defense.
If my dog bites someone inside or outside the apartment, will it get covered under my renters' insurance?

Imagine what will happen if your pet dog 'Frisky' bites your neighbor's daughter in your apartment and this lands the girl in hospital. In most cases, your renters' insurance (liability section) will cover the costs incurred. However, according to a report in Forbes, if Frisky belongs to any of the breeds like Pit bulls and Staffordshire terriers, Presa canarios, Akitas, Doberman pinschers, Chows, Great danes, Rottweilers, Siberian huskies, German shepherds, Alaskan malamutes, or wolf-hybrids, you stand the chances of getting the cover dropped. While many insurance companies provide cover for all breeds, there are others who may refuse to cover the liability for some of the above-mentioned dog breeds or their mixed breeds because these dogs are too aggressive.
How long has the insurance company been in business?
You do not want to be duped by a fraudulent renters' insurance company. Hence, it is important to check the credibility of the insurance company. Only if it has been operating in your area for many years and is committed to providing fair insurance coverage, you should buy a policy from them. The Internet has made things easier. Reviews of insurance companies can help you make the right choice. Do some market research, try to compare the benefits and coverage of various policies, and pick the best one. If you are new to the area, speak to your neighbors or landlord to know about the different renters' insurance policies.
If I share my apartment with roommates, will the policy cover them?
Renters' insurance covers the immediate family members who stay with you. However, not more than two unrelated people can become part of a single policy. Hence, you will have to take separate policies for the remaining ones. You can add a roommate to your policy without any extra charges or increase in the cost of premium. You must remember that theft of your belongings by your roommate, or an intentional damage to your goods by him will not get covered by the renters' insurance. The most interesting aspect of renters' insurance is that if you file a claim for $1000 for a stolen laptop, your roommate will have to co-sign it. Even if he does not stay with you in the apartment and despite the fact that he has no legal ownership over your laptop, the insurance company will divide the amount of damage and send the checks to both of you. In this case, it is better to have separate renters' insurance policies.
What all will be covered under the renters' insurance?
It insures your personal belongings like furniture, electronics, clothes, appliances, etc. from a set of perils. In some cases, it does include computers, but if you are working from home, it may not be covered. Renters' insurance covers a set of perils which include theft or damage to personal belongings on or near the premises of your rented property. It also gives coverage for the expenses incurred in case your dog bites someone. If your property is damaged because of fire, a volcanic eruption, hailstorm, windstorm, or snow, a renters' insurance will cover it. However, it does not cover natural calamities like floods and earthquakes. It does cover expensive items like furs, jewelry, firearms, or silverware but there is a limitation to it. Also, it provides liability coverage to you if someone gets hurt because of you or if you damage someone's belongings accidentally. If your rented apartment is under repair and if you are required to move into a hotel and eat out, the renters' insurance covers your temporary living expenses. There are many other perils listed and it is advisable to check with your insurance agent for the same. Renters' insurance covers your property even when you are away from the apartment, enjoying a vacation.
What is the difference between actual cash value (ACV) and replacement cost policies?
Actual cash value (ACV) policies are relatively cheaper as compared to replacement cost ones because they calculate the age of the lost/damaged item, and provide that amount. On the other hand, replacement cost policies pay you for the actual replacement of that particular item and hence are a little costlier to acquire. For example, if a television set you got 3 years ago gets stolen, an ACV policy will reimburse an amount equal to the television set's cost after 3 years of depreciation. The value assigned by the insurer to the item may differ from case to case. However, a replacement cost policy will allow you to buy a television set of the same or competing brand and features. This will help you to get a better bargain for a little extra cost. However, certain expensive items may come with limited coverage and you will have to check with your insurance agent about them.
How do I get a discount on the renters' insurance policy?
Asking this question is important because many insurance companies offer renters' insurance discounts based on various criteria. Some give multiple-policy discounts if you buy homeowners' insurance, auto insurance and renters' insurance from the same insurance company. If you have installed fire extinguishers, fire alarms, sprinkler systems, smoke detectors, burglar alarms, deadbolts on doors, etc. you will be in a better position to get a discount. Another way of reducing the cost of renters' insurance is to pay your bill in full and on time instead of paying in monthly installments. Also, paying a higher deductible can lower your payment for the renters' insurance. This will save you a lot of money.
Will it cover my belongings if they get stolen or damaged outside my apartment?
This question is important because if you are someone who travels frequently and has many valuable goods stored right outside your apartment like your expensive mountain bike, lawn mower, designer furniture (in the basement), you should be insuring all these items too. In case a fire gulps all your expensive furniture, you will suffer a severe financial setback, as such goods add up to thousands of dollars. Most renters' insurance companies do cover your off-premises belongings but you should seek an affirmation on this.
What is personal liability and how does it help me?
Most standard renters' insurance policies offer liability insurance which means that you get covered for the risks of lawsuits or any such claims. Remember that the landlord is not liable for anything that happens on the rented premises, but you are. Let's look at three different scenarios where a personal liability insurance can come to your help. Scenario 1: You happen to injure someone, while he is in your apartment. Scenario 2: You accidentally break an expensive electronic gadget belonging to your friend. Scenario 3: You forget to close a tap, and the running water damages the flooring of your neighbor's apartment. You can be sued for personal injury or damage to the property in all these cases. If the liability coverage is absent, these incidents will bite away a large chunk of your savings. However, a renters' insurance policy which covers personal liability will save you that money.
How does the insurance company calculate my premiums?
You should know how the renters' insurance company plans your premiums. An insurance company will investigate the area in which you live. If there have been too many claims for theft or damage from your neighbors or previous tenants, your renters' insurance cost may be high. Also, it will determine if the geographic area is prone to hailstorms, damage from wind or storms, volcanic eruptions, etc. The construction of the building and the number of apartments in it will also influence your premium amount. The fire protection in your area will also be considered, including factors like whether there is a fire station within ten miles and the frequency with which water is supplied to the area. Also, if you opt for additional coverage and endorsements, it will hike your premium. Other factors which influence your premium amount include dollar amount coverage, deductibles, and type of renters' insurance.
Apart from these, you should also ask questions about the cost of renters' insurance, limitations of a standard policy, and the calculation of deductibles. Ask these questions before buying a renters' insurance, so that you are convinced of its suitability. Shop around for the right renters' policy to insure your belongings and cover personal liability.