When anyone moves into their new apartment the first time, they’re often more concerned with unpacking boxes, hooking up utilities, and getting the cable guy to confirm a time for installation. The last thing on their mind is renters insurance.
Like most people, you probably figured the landlord’s insurance was enough. Unfortunately, that just isn’t true. The landlord’s insurance only covers structural damages; it does not protect your personal effects what-so-ever.
This is why investing in a renters insurance policy is a smart move. Let’s take a look at some of the most commonly asked questions about renters insurance and their answers.
Renters Insurance FAQs
Q: What does the landlord’s insurance cover?
A: The specific property and premises that a landlord will pay to have covered is going to be insured for (most times) full replacement cost. In other words, if the landlord’s entire apartment complex burns to the ground and is a total loss, then the insurance company will pay to have it rebuilt to the exact replacement value that it estimated at before the fire. But even though they will have everything that was insured replaced, you need to remember that your landlord isn’t paying to insure your stuff.
Q: What is renters insurance?
A: Renters insurance covers the monetary value of your personal belongings if they are damaged, stolen or lost. There are two types of renters insurance: Replacement Cost and Actual Cash Value.
Q: What is the difference between the Replacement Cost and Actual Cash Value policies?
A: Replacement Cost covers the actual cost of replacing your damaged or stolen property. Actual Cash Value covers the costs to replace your property minus a monetary deduction for depreciation. This means insurance companies consider the age and condition of the lost item and then reimburse you for the item’s current used value. It’s probably clear that best renters insurance policies of the two is the Replacement Cost plan.
Q: Is my roommate covered by my renters insurance policy?
A: Yes. Three people living in the rental unit can be covered under one policy.
Q: How expensive is a renters insurance policy?
A: As of 2013, renters insurance cost Americans on average $188 a year. Divide that number over 12 months, and it costs just a little over $15 a month. Split between you and a roommate, renters insurance is less than $10 a month.
Q: My apartment complex has bed bugs. Does renters insurance cover me for that?
A: Renters insurance does not protect against bed bug infestations. If the bed bug infestation was a prior condition, your landlord is responsible for extermination costs.
Q: Is renters insurance tax deductible?
A: Renters insurance is not typically tax deductible. It is only tax deductible if you operate a business from your residence.
Q: If renters insurance covers fire and smoke damage, does it also cover flood damage?
A: Renters insurance does not cover flood damage. The only instance in which it would would be if a pipe burst in your wall, causing a leak and damaging your things.
Q: If I move out of my apartment and into another rental, can I still use my same renters insurance policy?
A: Yes. Your renters insurance policy moves with you. Though do contact your insurance agent if and when you are moving; you might get a discount!
There are a lot of good reasons to get renters insurance; just look at all the stuff in your living room alone. In general, any good landlord is going to have coverage in place to protect themselves. But you need to take the due diligence to look out for yourself, otherwise you could get in a dicey situation. Take the time to look into things now and make sure you’re covered before an incident actually occurs.
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