HomeInsuranceWhat should I know about acquiring renters insurance?

What should I know about acquiring renters insurance?

Many insurance companies will give you a discount on your renters insurance if you buy it along with another policy — such as auto insurance — which is known as “bundling.” For consumers, Klamm said, “the first piece of advice is to get it — renters insurance — and then to consider cash value versus replacement cost.”

Insurance companies make this distinction between the kinds of compensation a policyholder receives after losses. Essentially: Would you prefer to receive the dollar value of what you own (the “cash value”), or the cost of replacing it (which tends to be higher, as goods depreciate over time)? If you opt for the “replacement cost,” you’ll pay a higher monthly premium.

What’s covered by renters insurance?

Most renters insurance policies include:

■ Personal property protection: If your belongings are stolen or destroyed, the insurance company pays (minus your deductible).

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■ Liability and medical costs: If you’re found responsible for a person being injured or property being damaged in your home, the insurance company pays.

■ Loss of use: If you need to relocate after a disaster while your home is being repaired, the policy may cover hotel bills and other unexpected expenses in the interim.

Remember to update the policy over time

Klamm advises policyholders to check in and make changes to their coverage choices over the years.

“While people tend to get a policy and pay on it without changes, the limits get completely askew with reality as to what things might cost over time,” she said. “So check in on those and see that they’re adjusted, as you do tend to acquire more things.”

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