Choosing A Renter’s Insurance Policy
Here are some things to consider when choosing a renter’s insurance policy:
Total Cash Coverage – This is the total amount of renter’s insurance that you will need in the case that your total home was destroyed. This is the purpose of a well-detailed inventory list. Whatever dollar amount you’ve determined for your possessions, add a few thousand dollars more for those things you’ve forgotten or under-priced.
Deductible – This is the amount you will be expected to pay for a loss before your renter’s insurance kicks in and pays. Deductibles can be as low as $100 and as high as $2,000 or more. The lower the deductible, the higher your premiums will be. Keep in mind how much you could afford to pay as a deductible today if your home were destroyed.
ACV (Actual cash value) or Replacement cost – Although some insurance companies pay both ways, you’re better off choosing a policy that pays replacement cost. Everything depreciates so you will be in a better position to replace your belongings with a policy that pays replacement cost rather than what they are actually valued at today.
Premiums – Some renter’s insurance is paid annually, while other companies allow you to pay quarterly or even monthly. Before you choose a particular company, shop around and compare coverage as well as cost.