# Renters Insurance Issue 1
Meet Peter. Peter is a State University junior about to move into her first apartment. Peter thinks she has what she needs: everything from books to bed sheets. However, she’s actually missing one thing: renters insurance. Peter is stunned. What is renters insurance and why does she need it? Well, let’s start with the “what”. Like most types of insurance, renters insurance reduces the costs associated with a risk, in this case the risk of personal items being damaged or stolen, in return for a monthly fee called a premium.
Not only that, renters insurance can even cover the legal fees and medical expenses that could result from someone being injured in your apartment. Sounds pretty great right? So how does renter’s insurance work exactly? Well, almost all renters insurance policies work through a deductible and limit. A deductible is simply the amount of money Peter must pay per incident before her insurer pays the rest, while a limit is the maximum amount her insurer will pay. For example, let’s say Peter’s insurance plan has a $200 deductible and her apartment recently suffered a fire that destroyed $5,000 worth of her personal property. Under her plan, Peter only has to pay the first $200 of that bill; her insurer will cover the rest up to a limit, say $25,000. Peter is intrigued. After all, saving $4,800 is pretty compelling. But still, is renters insurance truly necessary?
Well, technically, no. Unless her landlord requires renters insurance, and many do, Peter can technically avoid the purchase. However, in the long-run, avoiding renters insurance just isn’t a good long-term move. One, it’s not that expensive, only about $20 a month, and two, it covers expenses that your landlord just won’t, namely stolen or damaged possessions. So, is avoiding a $20 payment each month really worth the risk of someday being saddled with a massive bill? We think not. Hopefully, you and Peter now understand how renters insurance works. Be sure to check out our next video, where you can learn how to actually get renters insurance, and be sure to check out our website, where you can find more educational materials and free recommendations for great renters insurance plans.
# Renters Insurance Issue 2
Meet Peter. Peter is a State University junior about to move into her first apartment. Peter has watched our video “Renters Insurance 101”, so she understands the importance of renters insurance. However, she has no idea how to actually get it. What should she do? Well, her first step is simple: shop around for the best renters insurance plan. To do this, Peter can either go online and get quotes from insurers, contact a local insurance agent, or use our prefered website to easily get great renters insurance. Now that Peter understands how renters insurance works and how to get it, as long as she follows these eight rules she should be set for the future.
Rule 1: Always opt for plans that reimburse the full replacement cost of an item, not just the cash value. That’s because cash value factors in depreciation, so your insurer may only pay $500 for that refrigerator you paid $2,000 for two years ago.
Rule 2: To save money, choose a renters insurance plan with the highest deductible you are willing to pay. The higher the deductible, the lower your monthly premium.
Rule 3: Before getting any renters insurance plan, be sure to carefully read its fine print. Rule 4: Be sure to shop around for renters insurance plans at least every three years. Depending on your circumstances, you may qualify for lower rates.
Rule 5: After you get your policy, do a home inventory. This is simply a record of the cost of all items in your apartment, ideally with photographs attached to prove ownership. This list will prove invaluable, both in determining how much coverage you need to buy, and in the event you need to file a claim.
Rule 6: If you have expensive artwork, furs, or jewelry, all items generally not well covered by standard renters insurance, consider paying a little extra to add them to your policy.
Rule 7: If your property is damaged or stolen, don’t delay, call your insurer and file a claim as soon as possible. They’ll likely reimburse you, even if the theft or damage took place outside of your apartment.
Finally, Rule 8: If you have roommates, possibly avoid adding them to your insurance plan. That’s because reimbursement checks are split equally amongst all policyholders, even if the destroyed property only belongs to one roommate. This is nightmare scenario waiting to happen, especially if your roommate is short on cash. Congratulations! You have finished the renters insurance basics curriculum! If you want to see our free recommendations for great renters insurance plans, or just find more educational material, be sure to check out our website!