It doesn’t matter if you own or rent the home you live in, there
are insurance policies you can buy to help preserve the value of your
property—whether it rests inside the dwelling, it
is the dwelling, or both. When you’re ready to buy home or renters insurance, pay attention to these dos and don’ts:
- Do buy renters insurance. You may not own the dwelling that you live
in, but you do own the contents. Your landlord's insurance policy only
covers the inside and outside of the structure as well as the landlord’s
liability. It does not cover your furniture, electronics, and other
property in the event of damage or theft, unless it is due to your
landlord's negligence. In addition, if a visitor is injured inside your
apartment your landlord's policy won’t pay the liability claim unless he
is at fault, but a renter’s insurance policy could.
- Don't forget flood insurance. Home and renters insurance policies do
not cover damages caused by floods. You must have separate flood
insurance coverage for that protection.
- Do create a home inventory. In order to ensure that the contents of
your home or apartment are adequately covered and that you have a
thorough list when it comes time to file a claim, make sure that you
complete a room-by-room inventory listing every item in every room as
well as information about each item’s purchase price, condition and
value.
- Don't purchase the wrong amount of home or renters insurance. The
limit for your dwelling should be based on the rebuilding costs not
actual property value. That could make your limit higher or lower than
the actual value of your property. In terms of contents coverage for
both renters and home insurance, always consider whether the policy pays
actual or replacement value when determining the
limit. A policy that pays actual value will factor in depreciation of
your property whereas one that pays replacement value will consider the
cost of replacing an item with a new item of similar quality, which
could be more than actual value.
- Do consider annual premiums. Paying renters and home insurance
premiums annually can create a discount and gives you fewer
opportunities to be late and lapse your policy.
- Don't forget umbrella insurance. Liability claims stemming from an
individual who is injured in your home can be very expensive. An
umbrella policy is an inexpensive way to extend your overall liability
protection. Umbrella policies kick in once the limit on your home,
renters or auto policy is reached.