When you own a house, you can buy a homeowners insurance policy to protect it. When you rent a house or apartment, you do not need homeowners insurance because you do not own the home. Instead, you can buy renters insurance for the protection you need. Buying a renters insurance policy is not always a requirement when renting, but it is always a good thing to have. When preparing to buy a plan, here are three decisions you will probably need to make.
How Much Coverage to Buy
The coverage you receive from a renters insurance policy is for the things you own. It is not for the structure of the place you live. As you consider buying a policy, you may want to create an inventory of your belongings to see how much they are worth. When you create the inventory, write down each item you own and the cost to replace it. When finished, add up your list. The total amount will tell you how much coverage you need. You might even want to increase your coverage a little to ensure that it provides an ample amount of compensation if you ever lose everything you own.
The Type of Policy You Choose
The next thing you must decide is the type of policy you want, and you can choose from two primary options. The first is the type of policy that compensates you through the actual value of your items. If you lose things you own due to something that the policy covers, this policy type provides compensation for the actual value of the items. If you purchased a couch for $1,000 a few years back, your policy might state that the couch is currently worth $300. Therefore, in this example, the insurance company will provide you with $300 for the couch.
The second type is called replacement cost coverage, and this type reimburses you for the costs to replace your things. You will pay a higher rate for this coverage, but it provides more coverage, so it is worthwhile in most cases.
The Deductible Amount
The third decision is the deductible amount you want for your plan. You can choose a low amount, such as $300, or you can also choose a higher amount, such as $1,000. You can ask an agent to explain how this works and the effects of different amounts.
These are the three main decisions you must make when buying a renters insurance policy. If you have questions about renters insurance or need a quote, you can learn more by contacting an insurance agent at a company like Woodmansee Insurance Inc.Share