If you rent an apartment or home, you might not think that you need insurance. After all, your landlord is responsible for fixing problems that may arise.
However, personal belongings that might be damaged or stolen are not covered by a landlord or property management company's insurance policy. Renters insurance protects your personal property against damage or loss, and insures you in the event someone is injured while visiting your property. In addition to personal belongings, some policies will also cover living expenses if your apartment or home is uninhabitable due to damage.
Renters insurance is also much less expensive than you may think. The premiums for renters insurance is about as low as $30 per month depending on the location and size of the rental unit and the policyholder's possessions. To help your agent or insurance company determine how much coverage you need, make a comprehensive list of your possessions, including purchase prices, model numbers and serial numbers. You can supplement this list with pictures of rooms or items as well. Then, estimate the value of your personal possessions, using receipts if you have them. This is the amount you will need in order to replace the contents of your rental unit or home if everything were destroyed.
One important factor to look for when shopping for renters insurance is whether the policy will reimburse for the "replacement cost" of your belongings or the “actual cash value” when they were lost or damaged.
Actual cash-value coverage will reimburse you for the value of your personal property at the time of the claim taking into account its age and wear-and-tear, minus the deductible. It's important to account for depreciation when considering this coverage option. For example, if your stereo system was stolen five years after you bought it, you would be reimbursed for the current value of the system.
Replacement cost coverage, on the other hand, will reimburse for the cost of a brand new stereo system, after you purchase the new system and submit your receipts. While the up-front premium cost is greater for replacement cost coverage, you are more likely to receive compensation adequate to replace your lost/damaged possessions.
Consumers looking to purchase renters insurance should contact an insurance agent or company to learn more. If you need help finding a licensed agent or company, contact the Division of Insurance’s Consumer Service Unit at csscomplaints@mass.gov or by calling 617-521-7794 and selecting option 2.