2009-02-06 / Columnists

Notes On Consumer Affairs

Should I purchase renters insurance? Do I even need renters insurance? These are common questions that new and existing renters often ask themselves. Many people mistakenly believe that renters insurance is unnecessary and over-priced and fail to consider that it covers the insured's personal property, liability, and guest medical coverage at an average of between $150 and $350 per year. When you calculate the cost of replacing all or your personal possessions, or being liable for an accident that occurs in your rental unit, this price can seem very reasonable. Being more informed about renters insurance will ensure that you receive all available discounts and that your possessions are properly protected.

Many renters wrongly assume that their landlord's policy will cover them in the event of a loss, but generally, a landlord's policy will only cover damage to the building, leaving the tenant's possessions uncovered. Renters insurance covers the personal property of the insured, usually up to a limit that is determined by the policy holder or the insurance company, less the deductible. Not only does renters insurance cover personal property losses that occur at the policyholder's residence, it covers personal property losses all over the world. This means that if a suitcase is lost or if personal property is stolen from your car, you'll probably be covered. It is very important to choose a coverage limit that will adequately protect your personal property. Many people underestimate how much their property is worth. To determine how much coverage you need, make an inventory of your possessions and their value. Many insurance companies offer checklists to aid you in this task.

It is important to be aware that there are limitations to the type of items covered under a renter's policy. These items often include, but are not limited to jewelry, furs, cameras, musical instruments, silverware, fine arts, manuscripts, books, antiques, golf and sporting equipment, stamp or coin collections, and hand or power tools that are used for business purposes. These items can be fully insured by purchasing scheduled property coverage. Be sure to ask your agent about any special items that you may have to make sure that they are properly insured.

The insurance discounts offered differ by company, so be sure to check with your agent to find out what discounts your company offers. Many companies offer discounts for security features such as dead bolt locks and security systems, as well as for safety features such as fire extinguishers, smoke detectors, and carbon monoxide detectors. It is also common for insurance companies to offer discounts to customers who have multiple policies, such as automobile and renter's insurance, through the company.

You can also save money by changing your deductible, the amount that you pay when making a claim on your renters policy. The higher your deductible is, the cheaper your premiums will be. However, be sure that when you choose a deductible, you choose an amount that will not impose financial hardship in the event that you do have a loss.

It is very important that you understand what your renters policy covers. Under a renter's policy, your possessions are covered against losses from fire or smoke, lightning, vandalism, theft, explosion, windstorm and water damage that results from the failure of

plumbing or appliances. There are certain perils that renter's policies do not cover in New York, such as earthquakes and floods. In order to be covered against either of these perils, a separate policy must be purchased. If you believe that your rental home or apartment might be at risk for flood or earthquake damage, you should discuss your concerns with your agent.

As with most things, you can often save money by shopping around since premiums often vary greatly by company.

You may wish to ask friends and family for referrals. To learn more about renters insurance, consider visiting the New York State Insurance Department's website at: http://www. ins. state.ny.us/, or the Insurance Information Institute's website at www. iii. org.

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