You have just arrived home after a hard day at work. As you attempt to unlock the door you realize it’s not locked. As you open the door and step inside, you’re filled with disbelief. Your furniture is gone. Your television and stereo are missing. Your computer has disappeared. You have been robbed. And you don’t have insurance.
According to a recent survey conducted by the Independent Insurance Agents & Brokers of America, nearly two-thirds of renters do not have renter’s insurance. This may be due to a number of common misconceptions people hold.
• “My landlord’s insurance covers my belongings.” Not true. The landlord’s policy covers the building, not its contents.
• “My roommate has a policy, so I do not need it.” You are not automatically covered.
• “I’m covered under my parents’ homeowner’s insurance.” While many home policies cover dorm living, most do not cover apartment living. Check with your insurance agent to make sure you have the right coverage.
• “Renter’s insurance is expensive.” Not true. For the price of one pizza a month you can have renter’s insurance. The cost is minimal when compared to replacing all your items.
Renter’s insurance also covers possible liability. Guests or visitors who hurt themselves at your home could sue for medical damages. Most renters’ policies provide for this possibility.
Cash value vs. replacement coverage
Pick the renter’s policy right for you: actual cash value coverage or replacement cost coverage. Actual cash value coverage pays the actual value of each item at the time of the loss. Replacement cost coverage pays what it would cost to replace each item in the current market.
Replacement cost coverage is slightly more expensive; however, it is usually worth it. Technology items, such as computers, lose value after just one or two years. This means a computer you bought last year for $1,200 may only be worth $720 this year. With cash value coverage, you would only get the $720, subject to the policy deductible. With replacement cost coverage, you would get the money to purchase a new computer of a similar kind and quality with no deduction for depreciation.
Before you purchase
Here are a few steps everyone should take before purchasing renter’s insurance:
• Make an inventory (include brand name, model, serial number and value) and photograph or shoot a video of your possessions.
• Store these, along with receipts for major purchases, in a fireproof place away from your home. Update information each year with new purchases.
• Find out if you need to purchase additional coverage for expensive items, such as antiques, jewelry or major electronics.
You may be able to save money if you purchase renter’s insurance from the same company that provides your car insurance.
So, what would you do if you came home and found that all your possessions were stolen or destroyed? With renter’s insurance, you can breathe a little easier knowing you are not in it alone.
Protect your belongings and yourself with renter’s insurance.
• COUNTRY Financial Representative Marcia Kennedy, whose office is located at 1640 S. Stapley Drive in Mesa, may be reached at (480) 325-1521, ext. 232.