In recent years, the restrictions on lending have gotten tighter and tighter. This, in turn, is causing more people to rent a home rather than buy a home. Renting in some ways is the cheaper option. This is typical because you are not responsible for things a homeowner would be responsible for, such as maintenance and repairs. However, there is a very substantial difference between owning a home, versus renting one. The difference is that with homeowners insurance the belongings in your home are covered, and when you are renting they are not. But, that does not mean that the belongings in your home can’t be covered. They can still be covered, by means of renters insurance. There are a few things you should pay attention to and keep in mind when buying a policy.
1. How much coverage do you need?
The basic use of renters insurance is to cover the cost of replacing the belongings in your home in the event of something unfortunate like an accident, theft or by means of a natural disaster. With this in mind, the smart way of determining how much coverage you need is to take an inventory of all the possessions you have in order to have a good idea of the coverage you need. When doing this take note of what the item is, when you bought it, and how much you paid for it as well as what you believe it is worth now. After you have added all your belongings up, you’ll have an idea on how much coverage to buy.
2. Understand what you aren’t covered for.
Renters insurance typically covers for a wide range of disasters, but there are some policies that you aren’t covered for. These are things such as an earthquake or flood. So, whenever you decide to purchase renters insurance you need to be sure that you have all the coverage that you may need versus not having enough in the event of a disaster.
3. Different coverage types
There are two main coverage types when considering renters insurance and what type to get. The first type is called “Actual cash value”, and the second is called “Replacement Value Policy”. They are exactly as they sound. Actual cash value takes into account depreciation of the items over time, while the replacement value policy covers the full cost to replace the items.
4. Ways to save on insurance
A pretty common way to gain a discount on your insurance cost is to bundle insurance plans together at the same company. When bundling insurance policies together, you can save up to 20 percent or more. This can equal up to hundreds or even thousands of dollars a year in savings
5. Opt for a higher deductible
A deductible is essentially the money in damage that must be done before the coverage takes effect. This, in turn, means that you may have to pay more upfront in the event of an accident, however, your monthly premiums will be lower as a result. A lot of times, if you opt for the higher deductible, the amount of money that you save over time will be enough to offset the expense and then some.
We hope this information has been useful in educating you about buying renters insurance. For more information, feel free to use our contact form or call us at (512) 445-5555 to speak with a member of our team today!