Why You Should Buy Renters Insurance

Renter’s insurance can protect you against financial loss from damage caused by fire, pipe/water leak damage, and explosions. It also can protect against losses from theft, vandalism, or injury to others that occurs in your unit. Note that floods, earthquakes, tornados, and hurricanes aren’t always covered, so you may need to buy an additional policy.

According to the National Association of Insurance Commissioners, Washington, D.C., the average cost of rental insurance is $15 to $30 a month. Even if your individual items aren’t worth that much, it would cost a lot of money to replace everything at once.

To find the best deal on renter’s insurance, follow these steps:

* Inventory your possessions. Make a list of the item descriptions and values so you know how much coverage you need.

* Compare rates. Bundling insurance policies can save money. If you have car insurance, start with that company to see if it offers discounts on multiple policies. Then do an Internet search or call companies directly to compare prices.

* Identify your maximum deductible. A policy with a higher deductible—the amount you pay for before coverage kicks in—will have lower premiums. If you can afford to take the risk of a higher deductible, consider that option and save to cover the deductible in your credit union savings account.

* Check for other discounts. Sometimes policies offer discounts for buildings that have protections such as deadbolt locks, fire extinguishers, and burglar alarms. Ask about a lump sum discount—if you pay for a full year in advance, many times the overall cost of the policy is reduced.

* Decide between an actual cash value or replacement cost policy. Replacement cost policies may be more expensive now but, if you ever make a claim, you could end up saving a lot of money.

* Find out what’s not covered. The cheapest policy might not be the best. Are there pet restrictions? What type of personal liability incidents does your policy cover? And what doesn’t it cover?