After a catastrophe has already hit your home, it’s too late to ask, “How much renters insurance do I need?” The time to figure out what type and how much renters insurance coverage is right for you is before an emergency strikes. As you know, Georgia frequently gets hit by severe weather. Florida hurricanes often make landfall in and affect Georgia. But it’s not only natural disasters that can strike. There are several odd renter situations that you might need coverage for in Georgia. Having solid personal property protection for your rental is essential for peace of mind. If you’re like most Georgians, you’re probably wondering how renters coverage works and what the average cost is. So, let’s get into it.
Understanding Renters Insurance and Its Benefits
First things first. Do you currently have renters insurance? Maybe you haven’t thought much about it. You might think your landlord will take care of any problems that come up. You may have heard that your landlord’s policy will pay for any damage that occurs due to an emergency. However, this is not completely accurate.
Your landlord’s policy will only cover structural damage to the home itself. In other words, if the place catches fire, the landlord’s policy will pay to repair things like burned walls, cabinets, flooring, etc. But that still leaves your personal belongings, like your laptop and your clothes, uncovered.
It’s a smart move to invest in a renters policy to get personal property coverage. Then, in the event of some unexpected devastation, you will receive compensation for lost or damaged personal items. Otherwise, you could be out a lot of cash in the event of an emergency.
Essentials of Renters Insurance Coverage
Just like a homeowners policy covers specific categories, so does a renters policy. There are three major parts of this type of policy. Understanding what the different sections cover will help you know how much protection you need for each. Additionally, knowing the specifics of each coverage type can help you customize your policy to ensure you are fully protected against potential risks or unexpected events.
Basics of Personal Property Protection
This part of your coverage protects your personal belongings in case of loss or damage due to a covered peril. Covered perils typically include things like fire, hail, windstorms, theft, and other weather-related incidents. You should check with your insurance agent to find out exactly what perils are named in your policy.
Liability Coverage: Preventing Financial Ruin
What happens if you have a visitor over and they trip over a basket of laundry and fall down the steps? This would be a devastating accident, but you could still be held liable. You could get sued for a significant amount of money, which is where your liability coverage kicks in and offers protection. You may be wondering if renters insurance will cover issues involving pets. If your pet causes harm to a guest, liability protection will likely more than make up for the amount you may be held liable.
Additional Living Expenses (ALE): Temporary Living Coverage
In some cases, a rental home could be so significantly damaged that you can’t live there while you make the necessary repairs. Additional living expenses (ALE) will ensure you have money to reside somewhere else while the home is getting fixed. This coverage typically includes costs for hotel stays, meals, and other necessary expenses that you wouldn’t normally incur if your rental was still habitable.
Optional Coverage
You may still be wondering what renters insurance in Georgia does (and doesn’t) cover. A standard policy does not include every situation. So, it is important to discuss your needs with an agent to determine if you require optional coverage. You may live in an area that experiences emergencies outside the scope of your regular plan. Such optional policies include protection from earthquakes and floods.
Calculating Your Coverage Needs
You may be wondering, “Renters insurance—how much coverage do I really need, and how much does the average renters insurance coverage cost?” The amount of your policy can vary based on several factors, so there isn’t a standard flat rate. The cost of a renters policy depends on things like the amount you choose, your location, and any additional protections you may want.
Conducting a Home Inventory: Step-by-Step
One factor that determines how much you’ll spend on protection is the contents of your home. In other words, how much do you have to protect? You’ll need to create a home inventory so that the value of your home belongings is accurately documented and calculated. Here are the steps to create a home inventory:
- Go room to room and write down what personal belongings and valuables you have in each room.
- Take pictures of your personal effects. You can group items together to make it simpler. If you have any items that are high in value, take individual pictures.
- Create a video of your home belongings instead of separate pictures.
- Assign value to your items.
- Gather receipts if you have any for valuable items.
- Document any serial numbers of relevant items.
Keep in mind that if you have high-dollar items in your home, you may need to purchase more personal property protection.
Evaluating Your Lifestyle and Risks
When deciding the renter insurance coverage amount you should purchase, you should evaluate your lifestyle and risks. For example, if you have a pool or trampoline, you may want to consider more protection for personal liability. If you are a collector of valuable art or jewelry, you may need to increase the amount of personal property insurance. Each policy varies on the amount of protection, which will reflect the renters particular needs.
Deciding on Coverage Limits Based on the Rental Market
Your agent may discuss what the average coverage limits are based on the rental market. The average policy limit for personal property is $30,000, while the amount for liability is $100,000. The average cost for this amount of protection varies from $10 to $14 per month.
Balancing Cost and Coverage
What happens if you need good insurance coverage but want to avoid paying high premiums? There are ways to maximize your savings and reduce your renters insurance premiums. You can get adequate protection without breaking your wallet. The deductible plays a big part in how much your annual premium will cost.
Choosing the Right Deductible and Premiums
The deductible of your renters policy is how much you will be responsible for paying before the plan kicks in to take care of the remaining cost. For example, if you have a $1,500 deductible and file a claim, you would pay $1,500 toward the replacement of your things, and the insurance company would handle whatever remains for the cost.
If you want to lower your annual premium, you can select a higher deductible. Just remember that if something happens, you’ll have to come up with the higher amount. If you do select a higher deductible, be sure it is an amount you’d be comfortable paying out-of-pocket at any time.