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So you’re finally ready to get your own place. You might be graduating from college, moving away for a job, or leaving your parents’ house for the first time. Whatever the circumstances, you are about to embark upon a significant rite of passage. At last, you will have a place to call your own. Your first apartment may not be anything to write home about, but at least it’s yours. Though your first-time renting experience comes with a lot of pride and liberation, it also comes with some stress and responsibility.
To make your transition as smooth as possible, avoid these seven common missteps of first-time renters. • Being unrealistic about the costs. • Not prioritizing. • Not viewing the apartment before move-in. • Not reading your lease. • Spacing out on utilities. • Forgetting the essentials. • Forgoing renter’s insurance.
Most renters underestimate the importance of having renters insurance. They mistakenly believe that, because they rent their property, they do not have the same need for insurance that homeowners do. This is actually a myth, and renters insurance is a critical financial protection for anyone who rents his or her home. For a very small monthly fee, you can get protection on your personal belongings as well as liability coverage. If anything ever happened to your rental, the costs could be astronomical, which is why renters insurance such an excellent investment.
A move to a new apartment is no simple task. You have to worry about paying deposits, transferring the utilities over to your name, starting your cable service, and more. With so much to do, an insurance policy is probably the furthest thing from your mind. However, purchasing renters coverage is just as important as your other move-in tasks, if not more so. Renters coverage is a form of home insurance for people who rent their homes. You might live in an apartment, duplex, or home, but if you rent your place of residence, you need renters insurance. In this post, we’ll discuss the ABC’s of renters insurance, including standard coverage's, covered perils, and types of policies.
Standard Coverage's Every basic renters insurance policy will come with two main protections: physical damage coverage and liability coverage. The physical damage component of the policy will pay out benefits if the belongings you store in your rental are lost or damaged. For instance, if your computer equipment were stolen from your apartment, the physical damage portion of your policy would reimburse you. Secondly, renters insurance policies offer liability coverage. This portion of the policy will pay for your legal defense and any judgments against you if you are sued for an accident or injury that occurred on your property.
Covered Perils In the insurance industry, the typical renters insurance policy is known as “HO-4” coverage. This type of policy will protect you from 17 different perils, including: • Falling objects • Lightning or fire damage • Theft • Vandalism • Wind and hail damage
Policy Offerings Aside from the level of coverage you select, the biggest decision you will have to make in purchasing renters insurance is whether to go with replacement cost coverage or actual cash value (ACV) coverage. With actual cash value renters coverage, the insurance company will only pay you for the present-day value of the lost or damaged item(s). For instance, you may have bought a computer two years ago for $900, but after factoring in depreciation, the computer may only be worth $200 or so. In that case, the insurer would reimburse you based on the $200 estimate, not the original purchase price. On the other hand, with replacement cost coverage, your insurer will pay out whatever it would cost to buy the lost or damaged item new today. Staying with the previous example, that would mean you would get $900 or whatever it would cost to replace your computer new.
When you’re moving into a new apartment, you’re often trying to juggle a million different things at once, like the moving process, paying your security deposit and rent, buying new furniture, and anything else that may come up. During this time, there’s one thing that tends to get neglected by many people - renter’s insurance. Like other forms of home insurance, renter’s insurance protects you from liability if the apartment is ever damaged and provides compensation for your possessions. Everyone should have it and it’s extraordinarily easy to obtain. Just ask your landlord about policies they endorse or look online to find a variety of different plans at your fingertips. If you think you don’t really need renter’s insurance, you might want to read this and reconsider:
If you rent your home and don’t think you need rental insurance, you are mistaken, but you are definitely not alone. In fact, over two-thirds of the 81 million renters in this country do not carry renters insurance. This is a disturbing fact when you think about the financial devastation that could befall these renters if an unfortunate event were to occur. Perhaps you’ve heard or thought about renters insurance, but you wonder, “Do I really need rental insurance?” In this post, we’ll answer this question for you with some of the best reasons for invest in renters insurance.
You’re Not a Homeowner, So Why Have Insurance? This is one of the most common protestations offered by renters who avoid rental insurance. After all, if you don’t own your home, what is the purpose of having property insurance? The answer is that, without a rental insurance policy, your personal belongings are unprotected. You may not be responsible for the actual structure of your dwelling, but you certainly have financial responsibility for the personal items contained within it.
What about the Landlord’s Policy? Another objection given to the purchase of rental insurance is that the landlord’s policy already covers everything. This is actually untrue. The landlord’s policy strictly covers the structure of the apartment building and nothing else. In fact, some policies don’t even go that far if a tenant is responsible for causing the damage. In other words, if you leave your bathtub water running and do water damage to your apartment and the one below, you might be liable for the damages.
What Do I Have That Needs Insurance? Some renters justify going without renters insurance because they rationalize that they don’t really have anything that is valuable enough to warrant coverage. But did you know that the average renter has almost $30,000 of personal belongings that are not covered by the landlord’s policy? Could you afford to pay $30,000 to replace your possessions? More than likely, the answer is no. Aside from your regular possessions, if you have especially valuable items, like jewelry, collections, furs, etc., you should also consider a rider on your rental insurance policy. A rider allows you to bolster your coverage for certain items of extraordinary value.
Do I Really Have to Worry about Liability? If your friend were to slip and hurt himself on your wet kitchen floor, you would be responsible for his medical bills and possibly even face a liability lawsuit. With rental insurance, any injuries your guests sustain are covered by rental insurance. The policy will also cover any judgments against you and pay for your legal fees in the event of a lawsuit.
Like almost anything else in our world, there are myths about rental insurance. Myths arise from people that are uneducated about the certain cause yet are still expensing advice. These myths get accepted as fact because they are often the easy way out, and people rarely ever want to dig deeper. Well, we got news for you: you are going to want to dig deeper if you are to avoid succumbing to these common rental insurance myths.
Common Myths • My landlord has it covered- You would be amazed how often people think they are covered by their landlord insurance. A landlord’s insurance only covers the building you live in, not your personal belongings. If your apartment were to be damaged in someway then you are covered, but if someone steals your TV you are out of luck. • I don’t own much- Many people don’t think their possessions are worth as much as they think they are. Even if you are living on your own for the first time, chances are you have some valuable accessories. Your Ipod, TV, and DVDs can add up to a lot more than you think.
The benefits don’t outweigh the costs- People think of insurance and they think of auto and home insurance, policies that can come with premiums of hundreds of dollars a month. In reality, renters insurance will only cost you $100-$200 a year, very affordable for even the poorest college student. • I’m not liable- Most renters do not even consider liability issues from events that occur inside their place of rent. If someone else gets injured in your house or apartment you are liable for what happens to them, and your landlord’s insurance is not going to cover it. • My parent’s policy covers my stuff- For most first time college students living on their own it is a common belief that their possessions, once insured by their parent’s home insurance, will still be covered after they move out. This could be true in some cases, but in reality once you move out those possessions no longer reside under that policy.
Most renters have a false sense of security because they wrongly assume that their landlord’s policy will cover any and all mishaps that befall their home. With this mentality, renters insurance looks like a superfluous and redundant expense. In reality, this could not be further from the truth. Renters insurance is a must-have financial tool if you rent your home. Your landlord’s policy covers only the property, not your personal belongings. So, without renters insurance, you stand to lose a lot if disaster ever strikes your apartment. To underscore the importance of renters insurance, we’ve created the following scenarios for you to consider.
Scenario #1 You’re making dinner, doing your best Emeril impression, and the doorbell rings. You leave a pan on the stove, and, when you return, BAM! the kitchen is ablaze. Your apartment fills with smoke, dishes and pans crash to the floor while you put out the fire, and your place is a wreck by the time you get things under control. Your landlord’s policy will cover the damage the fire did to the physical structure of your rental. However, your couch that reeks of smoke and all of those broken dishes are your problem. If you had renters insurance, these items would be covered.
Scenario #2 You come home after eight long hours of working for The Man. You get a sneaking suspicion that something is amiss in your apartment. You notice one of your windows is broken, and your prized collection of Superman comics is long gone. You surmise that some neighborhood hooligans broke in and absconded with your precious collection. Even though you may not have been able to replace all of those man of steel comics, your renter’s insurance company could’ve paid for some of the costs. But, alas, you don’t have one.
Scenario #3 You have a hot date, and you decide to wind up a terrific evening by inviting your date in for a night cap. Mr. Jammers, your otherwise sedentary feline, suddenly begins acting like a sociopath hopped up on catnip and decides to claw your date’s face off. The evening concludes in a bed-a hospital bed. An emergency room visit and 15 stitches later, you’re stuck with a hospital bill and no second date. If you had renters insurance, you probably still wouldn’t get a second date, but your liability coverage would take care of the hospital bill. Better to be single and insured than single and poor.
