Your Finances: Tenants should get renters insurance

Many people think that renting a home or apartment means not having to worry about insurance. They assume the landlord's insurance policy will cover the cost of any damage. However, in most if not all cases, the policy won't replace your personal belongings in the event of theft, fire, water damage or more.

Hoping it'll never be used

Are you currently renting? Here are four suggestions when considering insurance:

1. Err on the side of caution. Insurance is something you never want to use, but almost always want to have.

I say that because, if you have to use the insurance, it means something bad has happened, such as a fire, and you have been negatively affected. In such a case, you are probably going to be relieved that you have insurance to help offset the financial impact of losing your belongings.

2. Inventory your possessions. Generally, renters insurance is very affordable. However, it is always a good idea to do cost-benefit analysis to determine the cost of renters insurance versus the cost of replacing your possessions.

The best way to get an accurate figure is to take an inventory of all the stuff you own, including your furniture, household items, electronics and clothing. Most people find that the cost adds up quickly.

Taking inventory of your property will help you have a good idea of how much insurance coverage you will need. Additionally, you may want to make a video backup of your belongings and store it somewhere safe — like in a cloud. That way, if you do need to file a claim, you have proof of all your belongings.

3. Bundle with existing policies. Consider combining your renters insurance with, for instance, your automobile policy. By choosing one company to service all of your insurance needs, you can save with multiple-policy discounts.

4. Don't forget your umbrella. When you are shopping around for renters insurance, or the next time you renew your existing policy, you may want to discuss your specific situation with your insurance agent to see if it makes sense to get an excess liability policy. Also known as an umbrella policy, this insurance provides a layer of protection above and beyond your homeowners/renters and automobile insurance.

While renters insurance may not be required by most landlords, it should be considered. And, as always, I recommend discussing your specific situation with a qualified insurance agent.


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