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Renters Insurance Can Be a Relatively Cheap Form of Protection for Your Possessions

by Richard Barrington

Getting your first apartment can be a liberating experience. It brings new levels of personal choice, privacy, and freedom to your life. It can also be a learning experience, and to make sure that learning experience isn't the unpleasant kind, one of the things you should learn about is renters insurance.

As you move through life, you may find yourself buying various kinds of insurance, from auto to health, homeowners to life insurance. Of all these forms of insurance, renters insurance may well be the cheapest, so it can be a good place to learn about how to buy insurance. At the same time, it can provide you with valuable protection as you start to accumulate possessions.

What is Renters Insurance?
Renters insurance is a policy which covers the contents of an apartment or other rental property. Your landlord should have a policy which covers the value of the structure itself, but what about your possessions? To make sure you are covered against loss, theft, or damage to the contents of your apartment, you may want to consider rental insurance.

Rental insurance can either cover the estimated value of your possessions, or what it would cost to replace them. So, for example, your five-year old television set may only be worth a hundred dollars or so if you tried to sell it. However, replacing it would set you back a few hundred dollars. Since replacement cost is typically more than current value, replacement cost insurance is likely to be a little more expensive.

Renters insurance does not only protect possessions. It can also help cover certain living expenses if you are displaced from your apartment by a fire or other disaster. Short-term accommodations can be expensive, but renters insurance can help provide for these emergencies.

Why is Renters Insurance Important?
There are several reasons why renters insurance is important:

  • If you are just starting out trying to accumulate some savings and possessions, you can ill afford to be set back to square one by a one-time event.
  • As a renter, you typically have little control over the safety and security of your building. Renters insurance can provide you with protection even if your landlord doesn't.
  • Similarly, you have no control over the other tenants in your building. They may not be who you would choose to share living space with, but at least you can guard the value of your possessions with renters insurance.
How Do You Buy Renters Insurance?
Here are some steps to take when buying renters insurance:
  • Make an inventory of the contents of your apartment. Note serial numbers where applicable, and estimate the approximate value of each item. Document any particularly valuable or unique items with photographs. This inventory should not only be helpful in getting insurance quotes, but it could come in handy if you ever have to fill out a burglary or damage report.
  • Ask friends and business associates for referrals of insurance agents.
  • Do some online comparison shopping for the cheapest options.
  • Check potential insurance companies with your state insurance department, and with ratings agencies like A.M. Best or Standard & Poor's.
Renters insurance isn't just worthwhile if something bad happens. You may find the day-to-day peace of mind is well worth the cost.

Insurance Information Institute, Renters Insurance

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