The catastrophic damage of property in the Midwest due to the recent flooding and tornadoes is a stark reminder of the importance of having proper insurance coverage. For example, 2 out of 3 renters go without renter’s insurance, even though the cost can be quite affordable (premiums can be as low as $12/month depending on the coverage). Yet renters are more 50% more likely to experience theft. Although your landlord may have insurance that protects the physical building in which you reside, this insurance will not cover your personal property. Here is some important information you need to get the coverage that protects you in the event of a catastrophe:
- Make sure that your policy covers the replacement cost of your personal property not the current depreciated value.
- Get liability coverage as well to protect you in the event that a visitor is hurt or harmed in any way on your property. A good rule of thumb is to obtain coverage in the amount of your net worth.
- Consider additional coverage for living expenses if your home becomes uninhabitable.
- Beware of exclusions in the policy, such as flooding for example, and make sure to purchase a separate rider in areas prone to hurricanes, floods, tornadoes and earthquakes.
- Consider raising your deductible and installing smoke detectors and fire extinguishers to lower your premium.
