If you’re renting a home or apartment you most certainly need cheap renters insurance. Without it, you’re risking potential financial losses if your personal belongings are damaged in a fire or stolen in a burglary. The fact is, industry experts estimate that less than half of all renters carry renters insurance policies.
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When we talk about cheap renters insurance, the term “cheap” is really a misnomer due to the fact that the average policy costs less than $200 annually. Let’s face it, that’s not much. At a cost of $12 to $16 per month there really is no reason to not have renters insurance. $200 annually is a small price to pay when you consider you probably spent more than that just on your laptop or television alone.
Two Types of Renters Insurance
There are two types of cheap renters insurance policies available: the Actual Cash Value policy and Replacement Cost policy. The actual cash value policy does exactly what its name implies. It pays out the actual value of lost property regardless of how much it would cost to replace it. These policies take into account depreciation, as well as other factors, in determining actual cash value of lost property.
Replacement cost policies cover your lost or stolen possessions at whatever it would take to replace them in the current market. For example, if you paid $800 for a flat screen TV two years ago, and it would cost $1,000 to purchase that same television today, the replacement cost policy will pay you $1,000. The premiums for these policies tend to be 8% to 10% higher than cash value policies.
Coverage Provided by Cheaper Renters Insurance
Renters insurance protects you from financial loss of personal possessions due to fire, vandalism, robbery, and minor weather-related incidents. When we speak of minor weather-related incidents, we’re talking about situations like a gas grill being damaged during a hail storm, or even water damage to your furniture if a window was accidentally left open during a period of rain. Losses related to major weather-related disasters such as hurricanes, earthquakes, and floods will generally not be covered under a standard renter’s policy.
Renters insurance also does not normally carry with it any liability coverage. Liability coverage pays the bill if a guest sues you after slipping and falling in your apartment. Renters insurance simply covers your personal possessions and those of your guests for the previously mentioned conditions. If you prefer to have coverage against major weather-related disasters and liability, you can certainly add those as extras.
Comparing Cheap Renters Insurance Rates
As with comparing any insurance policies, comparing the rates for cheap renters insurance simply requires the investment of a little bit of time and effort. Search tools abound on the Internet to help you find the best rates in your area. Of course, some states will have regulations which cause the cost of renters insurance to be a bit higher than expected, but the previous quote of $200 annually is pretty average.
Renters insurance policies typically are issued in one year increments. It’s a wise idea near the end of your policy term to do another search for better rates. Not that renters insurance rates fluctuate a great deal from year to year, but you never know. You might also check with your auto insurance provider to see if they offer renters insurance. If they do, they will sometimes offer it a lower rate to those who bundle all of their insurance policies together.
If you own a home but rent a vacation property somewhere out of town, check with your homeowners insurance to see if your rental property is covered. If it’s not, a low-cost rider can be added to protect your possessions used or stored at the rental property. Even if you only spend a few weeks per year at the rental, cheap renters insurance is still a very good idea.
If you’re one of the millions of Americans who rent an apartment or house without renters insurance coverage, now is the time to start thinking about getting a policy. You never know when a fire may strike, a burglar will pay you visit, or weather will damage your personal property. For such a small amount of money there are really no downsides to cheap renters insurance.
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