Model Apartment with Umbrella and Coins symbolizing renter's insurance policy for new apartment

If you are new to renting an apartment, you may not be aware that you need renter’s insurance. Having renters insurance is extremely important to protect your belongings and protects you in the case of liability claims from people who visit your apartment. So, how do you find the right renters insurance and what is the process of getting it? Read below for your guide on renters insurance for your new apartment. 

Calculate the Coverage Amount You Need

The first step to figuring out which renters insurance is right for your new apartment, is knowing how much coverage you will need. The average renter typically has at least 25,000 worth of belongings in their apartment. The easiest way to calculate the worth of your possessions is to make an itemized list of everything you own, when you bought it, and how much you bought it for. As you buy new items, add it to the list so it always stays up to date. Once you have everything written out, total how much your personal belongings are worth. 

Actual Cash Value vs Replacement Cost

There are two different kinds of coverage you can get with your renters insurance. Actual cash value means you will receive the cash value of what your item is worth now after wear and tear and any existing damage. If you bought your couch 3 years ago, the insurance company will look at its current value instead of what you originally paid for it. With actual cash value coverage, the premium is typically lower, but you are receiving less money back if something happens to your belongings. 

Replacement cost coverage tends to have a higher premium. However, with replacement cost coverage, insurance companies compare your item to similar items on the current market and gives you the full price of what it is worth now, even if the item is older or has some damage. When deciding between the two you need to determine if you would rather pay a higher premium upfront or not receive as much money in the end for your belongings. 

Understand What is Covered With Your Renters Insurance

With renters insurance, there are certain circumstances that are covered and others that are not. When you are shopping around for different quotes, it’s important to be aware of what exactly your coverage includes. Most renter’s insurance policies cover damage to possessions brought on by fire, theft, electrical issues, some weather-related emergencies, plumbing, and vandalism. Often, floods and earthquakes are instances that are not covered by standard renters insurance policies and might require separate flood or weather insurance. 

Liability Coverage

When deciding on renters insurance for your new apartment, make sure it includes decent liability coverage. Liability coverage protects you as the renter from being sued for someone getting injured in your apartment. This includes any injuries that happen within your apartment that are not due to a structural problem. Injuries due to structural problems are typically the apartment complex or the landlord’s responsibility. Liability coverage also helps pay for legal expenses as well. Take note that there are other additional medical expense coverage plans to help pay for the injured person’s medical costs too. 

Loss of Use

Another thing to consider is the Additional Living Expenses (ALE) part of your renters insurance policy. This coverage helps to cover costs of hotel bills, restaurant meals, rentals, and other additional expenses that occur in the circumstance that you are unable to live in your apartment. Not all circumstances are covered with every insurance plan. For example, if you are unable to live in your apartment due to fire or plumbing damage, typically your additional living expenses are covered. However, if a flood or earthquake happens and you are unable to live in your apartment for a period of time, it may not be covered. So, it’s important to understand which circumstances are covered for the additional living expenses.