When browsing Phoenix apartment rentals, you will likely read about the importance of carrying rental insurance. Whether you’re a first time renter or a veteran of the apartment lifestyle, rental insurance can be confusing. What does it cover? Is it really necessary? In a nutshell, the answers are “a lot” and “yes,” respectively.
Here are seven tips for finding the right renter’s policy for your needs.
Read the contract
Many insurance companies have modified their contracts with less insurance jargon, but if you’re still confused about what’s covered, ask. Rental insurance is broken down into two main components:
Liability: The amount of coverage the renter has if found liable for bodily injury or property damage.
Personal belongings: The amount of coverage needed to cover the renter’s property, in case of damage or loss.
Get three to five different quotes
The beauty of renter’s insurance is its affordability. However, be aware that cheaper isn’t always better. Start with your car insurance provider and ask if they give multi-policy discounts for adding property insurance. Get a few more quotes from competitors and compare price points, J.D. Power rankings, and contractual differences.
Replacement costs matter
Speaking of contracts, make sure you purchase a rental insurance policy that provides full replacement cost coverage. This essentially means if you suffer a loss, your belongings will be replaced at current retail value. If a fire destroys your living room, you’re going to need a new television, new sofa, and new coffee table regardless of how old those items were at the time of loss.
Don’t skimp on liability
Many renters make the mistake of purchasing minimum liability because they’re forced to have coverage. Naturally, no one ever plans to have a loss. Consider a few real world scenarios, though. Fall asleep with a candle burning and start a fire? Liability pays for the damage to the apartment building. Dog bites someone? Liability pays for medical bills.
Take inventory of your belongings
While it’s helpful to know how much property to insure prior to obtaining rental insurance, you can always take your best guess. At some point though, you’re going to want to gather proof of ownership for future claims.
Scan receipts and note serial numbers for all electronics like televisions, computers, etc.
Take pictures of each room in your home.
Complete an inventory spreadsheet (your insurance provider may provide this).
Ask about flood and earthquake coverage
Just as you should know what losses are covered under your contract, it’s also important to know which ones are excluded – most commonly flood and earthquake. If you live in a high-risk area, you might want to consider purchasing a supplemental policy. Additionally, there is usually a maximum limit of coverage for theft of jewelry, artwork, and firearms. Have a rock on your ring finger? You might need a separate policy for that.
The difference in the deductible
While liability insurance does not require a deductible, personal property coverage does. Your deductible is the dollar amount for which you are willing to take responsibility before the policy pays out. There is a common misconception that renters who carry a $500 deductible must literally pay $500 when they file a claim. Rest assured your provider won’t be expecting a check from you. It simply means if you suffer a loss totaling $5,000 worth of personal property, you’ll get $4,500 to replace it. In general, the higher your deductible, the cheaper your insurance premiums will be and vice versa.
Don’t forget most property managers of Phoenix apartment rentals will require they be listed on your policy as an additional insured. For professional guidance in finding the perfect rental for you and your family, browse a complete list of properties overseen by Heers Management.