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Renters Insurance: Why You Need It and What To Look For

Many times renters mistakenly believe that the contents of their apartment will be covered by their landlord's insurance policy in case of theft or damage. In fact that is rarely the case. In order to protect your belongings it is very important to invest the $15-$30 per month on renters insurance -- a small price to pay considering the replacement costs of your valuables.

If you're in need of renters insurance, make sure you fully understand the policy options. The following are must have clauses in a good rental policy:

1. Coverage of Personal Property. The policy you choose needs to include coverage of all contents of the rental that you own. It is advised that you make a written and photographic inventory of your belongings to go over with your insurance agent so that together you can assign values to each item. Typically, insurers will assign an "Actual Cash Value" to your items which corresponds to a used replacement rather than a brand new market value price.

2. On Site versus Off Site Coverage. Check to find out whether the policy covers belongings only while they are in the rental unit or if it covers items indiscriminately. For example, if your bike is stolen while parked at another location, would it be covered?

3. Housing Expenses Reimbursement. Will your policy pay for your temporary living expenses if damage were to occur to your unit that required you to vacate? If so, find out how much the policy covers and for how long.

4. Liability. Will the policy protect you if a guest damages the rental? What if a guest is hurt and seeks medical reimbursement? Also check to see if guests belongings are covered in addition to your own.

5. Pets. Does the policy protect you if your pet is injured at the rental? If so, find out how much of the veterinary expenses would be covered. What if your pet injures a neighbor or guest -- are you held liable or not?

6. Flood Damage. Many policies will not cover water damage. However, extra insurance can be purchased specifically for this event. If your rental is in a high risk area you should definitely consider carrying the extra coverage.

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