Especially in today’s housing market, many people choose to rent rather than buy property. When renting, renter’s insurance will provide financial coverage for your belongings if you suffer a loss, as well as liability coverage if you accidentally damage the property. Here are some tips to help you when buying coverage.
Know How Much Coverage You Need
First and foremost, you should understand how much coverage you need. Though the average renter is believed to own $35,000 worth of belongings, it may be helpful to inventory your possessions so you can get an accurate estimate of their total value. The more valuable your belongings, the more coverage you need.
Liability coverage limits can also vary, with options as low as $100,000 or as high as $500,000. Balancing risk and budget will help you determine the right coverage level.
Understand Different Coverage Options
Renters insurance is typically available in policies that provide either the actual cash value or replacement value for your belongings. Actual cash value means that depreciation and wear and tear are accounted for when determining the worth of your items. These policies are cheaper, but you won’t get as much money if you need to file a claim.
Replacement value policies, on the other hand, pay claims based on how much it would cost to replace a damaged or stolen item with a similar, brand new item. Though more expensive, this can make replacing possessions more affordable.
Renter’s insurance is a surprisingly affordable way to protect your belongings — and most landlords require that you obtain this coverage! Pike Mutual can help with coverage options that are custom-tailored to your unique needs. Speak with one of our independent agents today to get started.