Renter’s insurance can be purchased in two different forms. These are Actual Cash Value and Replacement Value. The difference between these two is very important for you to understand, as it can make the difference between you actually being able to replace your damaged items and you having to pay additionally out-of-pocket to replace them.
First let’s look at Actual Cash Value. This type of policy pays to replace your possessions minus an amount for depreciation (the reduction in the value of items due to age and use), up to the limit of your policy.
A Replacement Cost policy pays for the actual cost of replacing your possessions (with no deduction for depreciation), up to the limit of your policy. The price of Replacement Cost coverage is about 10 % more than Actual Cash Value coverage, but it can be well worth the extra cost.
When you’re ready to purchase your coverage, you’ll find that Renter’s Insurance is actually very easy to get and that there are many insurance companies to choose from.
Insurers who offer homeowner’s insurance generally also sell renter’s insurance. In fact, a renter’s insurance policy and a homeowner’s insurance policy are almost identical. The main difference is that a renter’s policy doesn’t include coverage for the building, since the landlord owns that.
As with most any type of purchase, it’s always best to comparison shop. Prices vary from company to company, so it pays to shop around. Getting at least three price quotes is normally recommended.
You can call companies directly, get quotes online or contact an insurance agent. Your state insurance department may also provide information about prices.
We highly recommend contacting an independent insurance agent. They represent several different companies and can get you multiple quotes without you having to run around spending a lot of your valuable time doing what your independent agent can do for you right from his or her desk.
The most important thing to remember is to NOT shop by price alone. Choose a company that answers your questions and has a reputation for handling claims fairly and efficiently.
Look for an agent or company representative who takes the time to answer your questions. Remember, you’ll be dealing with this person if you have an accident or other emergency.
One of the things that you should ask your agent about is available money saving options. These are some ways to save money on premiums:
- Consider taking a higher deductible. The higher your deductible, the more money you save on your premium. Consider a deductible of at least $500. If you can afford to raise it to $1,000, you may get as much as 25% off of your premium. Remember, though, that you’ll pay the deductible each time you file a claim.
- Insurance companies often offer discounts on renter’s insurance if you have another policy with them, such as for your car or business.
- You can also get discounts if your apartment has a security system, smoke detectors or deadbolt locks.
- More discounts might be available depending on your age or whether or not you smoke.
The last thing that I want to cover is what to do if you are the victim of a theft or your home has been vandalized or burglarized. As you might expect, the very first thing that you’ll need to do is to report it to the police. Get a police report and the names of all of the law enforcement officers that you speak with.
Then, contact your insurance agent or company immediately and be sure to get answers to these questions:
- How long to I have to file a claim? (There are time limits on filing.)
- Do I have the coverage I need?
- Does my claim exceed my deductible? How long will it take to process the claim?
You’ll need to prove your loss, so don’t throw out damaged items until a claims adjuster has visited your home. You should also consider photographing or videotaping the damage. Make a list of damaged or stolen items for your adjuster, along with copies of any receipts that you have (it’s always good to keep receipts, especially for big purchases).
If your home is severely damaged and you need to find other accommodations while repairs are being made, be sure to keep records of all of your expenses.
Once you’ve notified your insurer of your claim, the company is required to send the necessary claim forms to you by the end of a set time period. (The time period varies from state to state). Be sure to return the properly filled out forms as soon as possible, to speed up your claim.
If you feel that your insurer hasn’t given you satisfactory service, you should talk to the agent or company representative who sold you your policy or your insurer’s claims manager. If you’re still unhappy, contact your state insurance department or local consumer protection office to discuss what can be done.