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How to Get Tenant Insurance
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|Much like getting homeowners insurance when purchasing a house, you need tenant insurance to protect you, the space you've rented, and the belongings inside.
After moving in to your rental property, getting tenant insurance should be the first thing on your after move to-do list.
While your landlord may be responsible for the property itself, you are liable for the belongings you bring into said property and any damage you do to it.
Take an inventory
Before you can begin getting quotes and estimates from insurance companies, take a rough estimate of the worth of the items in your rental property.
Insurance companies will base the premium and coverage on the estimated amount you give them so be sure to carefully tabulate the cost to replace your belongings in the event of an emergency, accidental damage or theft.
Actual cash value vs. replacement cash value
Another thing to be aware of before getting tenant insurance is the difference between actual cash value and replacement cash value, which will affect the cost of your monthly premium for contents coverage.
- Actual cash value (ACV) is the actual cost of your item at the time it was lost stolen or damaged and for the most part assumes that items depreciate in value over time
- This option will provide you with a lower monthly premium but you will be forced to come out of pocket to replace your goods
- Replacement cost value (RCV) gives you back the cost of similar items at current market value regardless of how long the item was in your possession
- RCV is the more expensive option, but allows you to replace all your possessions if they are lost, stolen, or damaged
The next step in getting tenant insurance is to look around for the best deal for you with the most logical coverage and deductible available.
Call or check online to get several quotes from various insurance companies before making your decision, keeping in mind as always that the cheapest option is not always the best option.
Thankfully, tenant insurance is fairly cheap as a whole.
Look into bundling
If you already have car insurance, ask your current provider for a quote. Sometimes they will give you a better deal if you agree to bundle your insurance with them.
Conversely, if you are looking for new auto insurance, see if the provider would be willing to throw in tenant insurance for free if you choose to go with their company.
While on the phone with the tenant insurance provider, ask questions to find the best policy for you at the best cost to you.
Some questions to ask include:
- Does the coverage have basic liability built in which covers damage to the building?
- What about contents coverage which covers the cost of your items?
- What are the risks?
- What is and isn't covered?
- Is there a personal articles policy for expensive belongings?
- How much are monthly payments?
- What is the deductible?
- How does pricing differ if being insured for ACV versus RCV?
- Is there an "act of God" clause in the policy?
TIP: Make sure the coverage you are accepting covers both basic liability and the contents of you home as tenant insurance could help fix damage that would otherwise be removed from your security deposit.
Document your belongings
Once you have chosen a company to get your tenant insurance from, take pictures of the items you own, holding on to sales receipt from especially expensive belongings if you have them on hand. Put these in a safe place in case a claim is ever required.
Also put your copy of the insurance policy with this documentation.
In the event of a claim
We all hope it never happens to us, but on the off chance that you have to file a claim there are some very important steps to take to ensure you are reimbursed.
Tenant insurance may seem like an added expense to your monthly bills, but if the day ever comes that you need it (which hopefully you won't) you will be covered. Regardless, you can rest easier knowing you're covered.
- File a police report immediately
- Contact your insurance company to ask what steps to take next
- File your claim with documentation of the loss (pictures of the aftermath, the police report, etc.)
- Do not give up immediately if your claim is denied, keep at it