Renters Insurance

The collapse of the housing market over the past few years has caused many people to take a fresh look at renting a place to live rather than buying a property. In many cities, demand for rental properties far exceeds availability. According to the latest statistics, over 80 million Americans now lease a home, apartment, or condo as their personal residence. This number is expected to increase as the mortgage industry continues to tighten its lending requirements and demand large down payments from potential homeowners. Unfortunately, the number of renters who actually purchase renter’s insurance remains dangerously low- around 30 million. If you currently live in the District of Columbia and are leasing a place to live, you should familiarize yourself with the value of having renter’s insurance protection.

The Basics of Renters Insurance

Buying renter’s insurance can sometimes seem like an impossible task. How much do I need? What will it cost? What’s covered and what isn’t? The truth is that a renter’s insurance policy works in much the same way as an automobile insurance policy. You decide on a coverage level and a deductible amount and then, in most cases, you make monthly payments to your insurance carrier. If your personal possessions are ever lost, stolen or damaged due to theft, fire, water damage, or certain weather-related situations, the insurance company will pay you to replace the items once you have paid the deductible.

A typical renter’s insurance policy also includes liability coverage. This protects you in the event that a visitor is injured in your home and sues you for damages. Many people don’t give much thought to this situation but unfortunately accidents do happen. Without the proper liability coverage, your income, savings, personal property, and even future wages could be at risk if you are found liable in a court of law.

Many people think that renter’s insurance will be expensive. But on average, if you live in Washington, DC a typical renter’s policy will only cost around $200 to $300 a year. That’s the price of a couple of large pizzas per month or two movie tickets. You have to agree that’s a pretty good bargain! You might be thinking that you don’t own that much property and what you do have isn’t worth that much. But statistics show that the average person has about $20,000 worth of personal belongings. Would you be able to replace them all if they were damaged, lost or stolen? Remember that a renter’s policy also protects you in the event of other occurrences- an electrical fire or burst water pipe. If you live in an apartment building, this can happen in another unit but can quickly spread and cause damage to your place. Why risk it?

Smart Tips When Buying a Policy

  1. If possible, always buy replacement value coverage. Generally, consumers are given the choice between “replacement cost” and “actual cash value”. They may seem similar, but in fact they are very different options. Actual cash value means that if an item is lost or damaged due to a covered event (such as fire or theft) you will be given what that item costs to replace MINUS the depreciation. Replacement cost coverage will give policyholders the full replacement amount. This type of coverage does cost a bit more than actual cash value but is definitely worth it.
  2. Be sure you understand what is excluded from your policy. A typical renter’s policy will not include coverage for damage or loss due to earthquakes or floods. If you live in an area where these natural disasters occur, you will need to add separate coverage for them. Some valuable items such as jewelry, artwork, or antiques may also require separate coverage. Check with your agent when writing up your personal policy.
  3. A main factor affecting your monthly premium will be the deductible amount you choose. The higher the deductible, the lower your cost. If you choose a lower deductible, such as $250, you will pay more for your policy. But if you have a claim for loss or damage, you will only have to pay the deductible amount. It’s important to consider your own financial situation when you decide on your deductible.
  4. Although it’s not required, it’s always a good idea to catalogue your possessions. For one thing, taking a complete inventory of what you own helps you determine the amount of renter’s insurance you need. Additionally, having a record of your personal belongings can be very helpful if you ever have to file a claim. A written list is fine but it is even better to have photographs and video evidence.

Ways to Save on Renters Insurance

As you’ve already discovered, renter’s insurance is very affordable for Washington, DC residents. Here are more ways to save on an annual renter’s insurance premium:

  1. Choose a higher deductible. Just like car insurance, the higher the deductible, the lower the price. Alternatively, a low deductible will be more expensive.
  2. If your rental property doesn’t already have them, install smoke alarms, deadbolt locks and a security system in your rental property. Having these safety features will generally give you a discounted price on your annual premium.
  3. If you qualify, ask about discounts for seniors (55+), AAA membership, or other organizational discounts.
  4. Some insurance companies offer savings to non-smokers. Find out about this possibility.
  5. Bundle your insurance policies such as life, auto and renter’s, together with one company. Most companies give a significant discount for this.

When shopping for renter’s insurance it’s always a good idea to contact several different insurance companies so that you can compare policies and quotes. We make this a simple and quick process. Our trained agents are available 24 hours a day to assist you in finding the best renter’s insurance policy- one that suits both your personal needs and budget. Let us help you get the peace of mind you deserve from knowing that your valuable belongings are protected by renter’s insurance coverage. Contact us today!