Regardless of whether you rent or own, having insurance to cover your stuff is important. Below is a break down of some key points to consider, depending on your situation.
This is probably one of the most straightforward types of insurance. Because you don’t own the building you live in, you only need coverage for personal items – electronics, furniture, etc. Get enough coverage to replace all of your personal property.
- To calculate the total insurance amount, take a quick inventory of your items’ value, then round up. It’s easy to think of the big items in your house, but consider the cumulative smaller items, too, like clothes, kitchen gadgets, etc. If a major catastrophe struck, how much would you really need to replace? After you’ve totaled everything, round up to the nearest thousand or five thousand. (Renter’s insurance is generally not very expensive, so having good coverage is worthwhile.)
- Take a video or photo diary of your belongings and keep receipts for large purchases. If you need to make a claim, the insurance company will ask for proof you owned the item. Taking 15 minutes to video all of the belongings in your home will save you a lot of headaches down the road.
- If you have a specific high value item, insure it specifically. A good example is a diamond engagement ring. Look into a “floater” policy for these big-ticket purchases, otherwise you may run into caps on replacement value for specific items.
If you own your home, that’s fantastic! But it means you will need additional coverage; it’s likely required by your mortgage company. In addition to insuring your personal belongings (see above), you also need to insure the physical structures – the house, fence, driveway, etc.
- Ask what types of disasters are covered, then add riders. Things like fire, lightning, and hail, and even smoke damage or damage caused by falling items are generally covered. It’s likely other types of natural disasters are not covered by a policy out of the box, so ask about adding riders for specific events like flooding or earthquakes.
- Look for “guaranteed replacement cost.” It might be tempting to go with a policy with a lower premium that only covers fair market value, but you may regret it down the line when your items have depreciated (and you’d be surprised how quickly they depreciate). Instead, look for a policy that covers replacement cost, so you get what you paid for your stuff.
- Ask what else is covered. Most commonly, homeowner’s policies will offer personal injury liability coverage up to a certain dollar amount, so that if someone slips on your front porch, you could file a claim. Other things your policy may include are coverage for “off-premises” accidents or thefts. Some of this coverage might not be necessary for your specific situation, so it’s good to ask what is included, then see if they can unbundle the pieces you don’t need for a better premium rate.
- Take a video or photos of the physical structures, not just personal items. As with renter’s insurance, you will need to submit proof of ownership if you ever file a claim. Make sure to update your photos when you do home improvement projects like a kitchen or bathroom remodel, and keep itemized receipts for big purchases.
No matter what type of insurance you need, shop around. Get at least three quotes with comparable coverage amounts to compare. Often, you will get a discount for bundling insurance, so if you already have an auto insurance policy with a company you like, see what they offer for renter’s or homeowner’s.
Also consider each company’s customer service reputation. Many companies will tout their customer satisfaction rates, but you can also search on the internet to see what other people are saying about their experiences. It can make a huge difference to have a friendly, responsive person to work with in a time of dire need.
Do you have other advice on what to have covered and why? Please share it in the comments below.