Understanding Renters Insurance Basics

    Published: 06-16-2009
    Views: 9,151
    Wells Fargo financial expert Stephanie Chisolm explains the basics of renter’s insurance and why it is so important to have.

    Stephanie Chisolm: Hi! I am Stephanie with Wells Fargo and Company. Today we're learning about the basics of how Renters Insurance works. Many landlords are now requiring tenants to get Renters Insurance.

    The cost of Renters Insurance can vary based on location of the property and the type of building, multi-family apartment, town home or condominium or single-family home. Generally speaking the premiums are between $12 and $25 per month and that provides you with enough insurance to cover $10000 - $35000 worth of possessions, usually the policy also includes liability protection of up to $300,000.

    The items covered by renters insurance includes such things as your televisions, computers, audio equipment, clothing, and furniture. Also your personal belongings are protected no matter where they are used. So, if something is stolen from your car or while traveling it is covered.

    Replacement cost coverage as the name implies pays to replace the possession up to the amount of coverage purchased such as the $10000 - $35000 limits on your policy. The alternative to replacement cost is called Actual Cash Value Coverage, which pays only what the lost or damaged item is worth today.

    In most cases if you moved within a state where you are currently insured, you can simply provide your new address and some information about the construction of the building you are moving to. However, if you move to another state some insurance companies may not be able to continue your policy. Your new address will generally be recognized as an insured location for a limited period of time effective the day you begin your move.

    However if your property is stolen or damaged in transit the reimbursable amount may be limited to a percentage of your total coverage. These things are explained in your policy, so be sure to check that or contact the company that issued the policy, or talk to an insurance professional.