A lot of renters don’t pause for a second to think about what may likely happen if there is a fire outbreak, someone breaks in and burgle their new TV set or stereo, or a visitor slip-up and falls on their house. The bitter truth is; you will be guilty! While your landlord has insurance that covers the real building, that coverage does not comprise your personal items or responsibility for harms which happen in the space you rent ~ be it an apartment or a house and yard.

In case of fire should damage or destroy your home, your landlord’s insurance will cover the structure. It won’t cover loss or loss of your personal belongings. Neither will it provide for the cost of temporary housing for you and your family.

You may think you don’t own enough personal property to make the cost of insurance worthwhile. You’re probably wrong! If you sit down and add up the cost of everything you own, you may be in for a big surprise. Think about what you have invested in such things as:

  • Furniture and accessories
  • Electronics like TV, stereo, computers
  • Sporting equipment
  • Artwork like paintings or prints
  • Clothing
  • Dishes, silverware, and cookware
  • Jewelry
  • Books

Could you afford to replace all of these things? 

The worse thing, what would you do if a friend is injured on your property and chooses to sue you for medical costs and other? It’s a frightening thought, isn’t it?

Hope you starting to get the picture why rental insurance may be a very prudent investment? 

The cost of rental insurance is based on some factors: 

  • The dollar amount of your coverage
  • Deductibles
  • Whether you choose to be reimbursed for Actual Cash Value or Replacement Costs (more about that in a minute)
  • Where your rental property is located and the number of previous claims made, not only by you but by others living in the same area.

Let me explain the difference between Actual Cash Value (ACV) and Replacement Costs. ACV is the value of your property at the time a loss takes place. For example, if your television set is five years old, it’s valued at much less than if it were brand new. The lesser amount is what you are reimbursed.

However, if you opt for Replacement Cost, you’re paid whatever it costs to go out and buy a new TV with similar features. Insuring for replacement price increases the amount of your premium so it’s a great idea to get quotes for both ACV and Replacement Cost policies. Then you can decide which option fits your needs and budget.

One other thing to remember is that valuable collections, jewelry, and guns are normally covered under a different policy or “proviso”. If you own these kinds of items, be sure to tell your insurance agent. You don’t want to find out after disaster strikes that they aren’t covered or that they aren’t covered for their true value.

One way you can reduce the cost of your rental insurance is to check with whichever company insures your car. If they provide rental insurance you may be eligible for a multi-line discount.

Rental insurance may be worth the investment just for the peace of mind it offers you.