Renting an apartment or house can be an exciting new chapter in life. But a few wrong turns can quickly turn a sunny sequel into a horror movie. Whether you’re an innocent college student moving into your first off-campus apartment or a street-smart renter who’s seen everything, renter’s insurance can help protect you. This often overlooked but essential coverage can save you from financial horrors in the event of unwelcome surprises. In this blog, we’ll explore some common insurance pitfalls and how to avoid them.

1. Underestimating the Value of Your Belongings

One of the more common mistakes renters make is underestimating the value of personal belongings. Many people assume they don’t own enough valuable items to justify renter’s insurance. However, when you start adding up the cost of electronics, furniture, clothing, talismans, and other possessions, you might be spooked at how quickly it all adds up.

Smart move: Take inventory of your belongings and estimate their value. This will help you determine the appropriate coverage level for your renter’s insurance policy. Keep in mind it’s often better to be over-insured than under-insured when it comes to protecting your assets from unwanted visitors (or other unfortunate accidents).

2. Neglecting Liability Coverage

Renter’s insurance doesn’t just protect your personal belongings; it also provides liability coverage. Liability coverage is crucial because it protects you in case someone is injured while on your rented property, and you’re found to be responsible. Without liability coverage, you could be facing eye-watering legal bills and medical expenses.

Smart move: Make sure your renter’s insurance policy includes liability coverage. It’s a relatively small additional cost that can save you from significant financial trouble in the event of an accident (traumatic or not).

3. Not Understanding Policy Exclusions

All insurance policies have exclusions, and renter’s insurance is no exception. Failing to understand what is and isn’t covered by your policy can lead to unpleasant surprises when you need to make a claim. It’s like one last scare at the end of a movie.

Smart move: Carefully read through the fine print on your renter’s insurance policy and ask your insurance provider for clarification on terms or exclusions you don’t understand. Heed all the warnings you’ve been given. Knowing what’s covered and what’s not, should help you make an informed decision about your coverage.

4. Skipping Additional Coverage for High-Value Items

If you own high-value items such as jewelry, artwork, ancient books, or other collectibles, your standard renter’s insurance policy may not provide sufficient coverage for them. Many renters make the mistake of assuming that their policy covers all their possessions (the good kind) equally.

Smart move: Consider adding a rider or endorsement to your renter’s insurance policy to cover high-value items separately. This will ensure these items are adequately protected in case of theft or damage.

5. Overlooking Loss of Use Coverage

Imagine your rental unit becomes uninhabitable due to a fire or other covered event. Where will you stay during the repairs? Without loss of use coverage, you may be left paying for temporary housing (which could be quite spooky) out of your own pocket.

Smart move: Make sure your renter’s insurance policy includes loss of use coverage. This coverage can help cover the cost of temporary accommodations, such as a hotel (a safe one!), while your rental is being repaired.

6. Not Updating Your Policy

Life changes, and so do your belongings. Many renters forget to update their insurance policy when they acquire new possessions or move to a new place. If you don’t keep your coverage up to date, you might find yourself underinsured when there’s a twist ending to your week.

Smart move: Regularly review your renter’s insurance policy and update it whenever you acquire significant new items or change your living situation. It’s essential to ensure that your coverage reflects your current needs accurately.

7. Ignoring Discounts

Insurance companies offer various discounts that can help you save money on your renter’s insurance policy. Some common discounts include multi-policy discounts, security system discounts, and claims-free discounts. Failing to take advantage of these discounts means you’re paying more than you need to.

Smart move: Ask your insurance provider about available discounts and take steps to qualify for them. For example, installing a security system (even if it records grainy footage) or maintaining a claims-free history can lead to significant savings on your premium. Here are other common discounts¹:

• Use smoke detectors
• Use deadbolt locks
• Stay with the same insurer
• Be over 55 years old

8. Choosing the Cheapest Policy Without Adequate Coverage

Let’s just say… maybe you shouldn’t go there? While it’s essential to find an affordable renter’s insurance policy, opting for the cheapest option without considering the coverage it provides can be a grave mistake. Cheaper policies may offer limited coverage, higher deductibles, or lack crucial features. You could think of them as a car that won’t always start.

Smart move: Strike a balance between affordability and coverage. Consider a deductible of at least $500. If you can afford to raise it to $1,000, you may get as much as 25 percent off your premium.² However, you’ll pay the deductible each time you file a claim. Compare quotes from multiple insurance providers, but also pay attention to coverage limits, deductibles, and policy features. It’s worth investing a bit more in a policy that provides the protection you need.

Who is Answer Financial?

Renter’s insurance is an essential part of renting a home, but you’re more likely to find a happy ending if you avoid common mistakes. Taking the necessary steps to avoid them can help ensure that your renter’s insurance provides the protection you need when jump scares occur. Answer Financial can make insurance buying less scary by helping you quickly compare rates and customize coverages from 40+ top-rated companies. Or call 1-800-258-5101 to speak about your individual needs with one of our experts.