Understanding Renters Insurance

The following two components comprise a basic renters insurance policy:

1. Personal Property/Contents Coverage
This provides protection for everything you own, except your auto. Thus, it is extremely important that you consider all of the contents of your rented unit to make sure your limits are high enough to provide total replacement cost in the event of a loss. Computers and other expensive electronic equipment - or jewelry, fine art or other valuables - may need to be listed separately to ensure proper coverage.

2. Liability Coverage
This provides coverage for bodily injuries in the event someone outside your household is injured within your unit, or if you become liable for someone else’s injuries (not related to an auto accident) in a situation elsewhere. Typically, you can buy liability limits that range from $100,000 to $500,000 as part of a renters insurance policy. For increased liability protection which will provide higher limits and broader protection, including auto-related liability claims, you should seriously consider Umbrella Liability Coverage.

Managing renters insurance costs
Renters are sometimes surprised to see that the cost of insuring their belongings is more expensive than they anticipated. This is because - when they are surrounded by other rental units - they stand a much greater risk of incurring a loss. For example, there is a greater incidence of theft in multi-unit dwellings as well as an increased risk of fire spreading to attached units or leaking water affecting another unit.

• Type of construction
• Location
• Age of building
• Number of units
• Amount of deductible - the amount of claim costs you agree to pay out-of-pocket (The higher your deductible, the lower your cost for insurance)

• Doorman
• Central alarm system
• Smoke alarms
• Sprinklers
• Higher deductibles