Renters insurance is a must

ByEmmaPatch

Kiplinger’s Personal Finance

Most homeowners knowthat they need homeowners insurance to cover loss or damage to their property— and if you have a mortgage, you usually have no choice. But if you’re one of the more than 100 million Americans who rent their residence, don’t overlook the value of renters insurance.

Some landlords require tenants to have renters insurance. But even if that’s not the case, a policy could go a longway toward protecting your property and finances.

If there’s damage to your rental fromfire or a break-in, your landlord is responsible for repairs to the property you’re renting but isn’t responsible for fixing or replacing your personal possessions. That’s where renters insurance comes in.

Policies typically cover up to a limited dollar amount for clothing, furniture and electronics. Particularly valuable items, such as jewelry, artwork and collectibles, may require that you get additional coverage, knownas a rider or a floater.

Whenshopping for a policy, be sure to tally up the value of your belongings as accurately as possible and determine whether the policy’s limits are adequate. Consider also whether it might make sense to store valuable items, such as family heirlooms, rarelyworn jewelry or artwork, at a safe location elsewhere, such as a safe-deposit box or a secure storage facility. Keep a list of your valued items with purchase and valuation records in a secure location aswell.

Renters insurance generallywon’t cover damage to your personal property from natural disasters, such as hurricanes or earthquakes, says JanetRuiz, spokeswoman for the Insurance Information Institute. For that, you’ll need to purchase special coverage.

Renters insurance also will cover liability up to a certain limit if guests in your rental injure themselves, and it’s found to be your fault. For instance, if your pet bites someone, your policy could cover medical expenses. And if you are put out of your rental because it’s damaged or otherwise uninhabitable, a policy will typically cover the cost of lodging elsewhere, up to a certain amount.

Although renters insurance could save you a lot of money, it doesn’t require a big investment. "It’s one of the most affordable products you can get— often as lowas $300 a year," Ruiz says.

Still, there are a number of strategies to cut the cost of renters insurance. You may be able to get a discount by buying a policy fromthe same company that insures your automobile, for example. You may also get a discount if you take steps to make your rental property safer frombreak-ins, such as installing a security camera, says Dustin Lemick, founder of BriteCo, a jewelry insurance company.

But it’s most important to shop around. You can compare coverage and costs of various renters policies at sites such as TheZebra.com and Gabi.com. And keep an eye on changing premiums. "Insurance companies are notorious for raising rates, and policyholders don’t even knowit," Lemick says.