Your Renters Insurance Buyer’s Guide
In a recent blog post, we broke down the basics of Renters Insurance. So now, let’s dig a little deeper to help answer your more complex coverage questions. In partnership with Safeco Insurance, we’re here to make understanding and getting a policy as simple and easy as possible, with the CommunityAmerica touch you know and love.
Deciphering the Deductible
The deductible is the part of a loss you’re responsible for paying, then insurance pays for covered losses beyond that amount. In other words, whenever you have a claim, you have to pay the deductible, so set an amount that feels right for you. Keep in mind that the higher the deductible, the lower the policy payment may be.
Choosing Your Coverage
When it comes to building your perfect policy, there are three main coverage categories to know about:
- Personal Property — covers your belongings, anywhere in the world. That means your things are protected both at your apartment, and while traveling, from instances of theft, damage or loss. One of the most common mistakes renters make is thinking they don't have enough things worth insuring. But, if there was a fire and you lost everything, from your TV and laptop, to clothes and furniture, those things can add up fast. The general rule of thumb is: add up how much all of your stuff is worth and purchase that much coverage.
- Liability & Medical Costs — cover you if a claim is made or a lawsuit is brought against you for injury or property damage to others. Accidents happen, and if one occurs in the apartment you’re renting (or elsewhere), you could be responsible for the cost of someone else’s medical care, lost wages, etc. The good news is your policy may help with those expenses. And if the injured were to sue you, your renter's policy could potentially help cover your legal fees, as well.
- Additional Living Expenses — if you're forced out of your rental due to a fire, repairs, or some other incident, you're covered there, too. Also called loss of use, your coverage determines the amount of time living expenses would be provided if you had to live somewhere else due to a covered loss or provides fair rental value if the loss is permanent.
Options for Determining Value
Another consideration is how you want your items valued. One option is actual cash value, which pays the depreciated value for items. For example, if your $3,000 TV is five years old and now worth $800, you would get $800 if it were stolen or damaged in a covered incident. While this coverage may cost less upfront, it likely pays less during a claim, according to policy limits.
On the other hand, replacement cost coverage pays for brand new items at today's prices, instead of their depreciated value. So, in this case, if you paid $3,000 for your TV, but a similar model now costs $3,600, you’d receive $3,600 in a covered loss. This coverage tends to cost more upfront, but pays more during a claim, up to your policy limits.
Still have questions? Contact the CommunityAmerica Insurance Agency by calling 913.905.7795, where one of our agents would be happy to help.