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Tuesday, October 23 2012
Renters insurance 101
The average renters insurance policy in the Chicago metro area is roughly $150 to $200 a year, according to several insurance sources.
Rates may be higher in the city and somewhat less in the suburbs, and depend on such factors as age, location and value of personal property. Determining the insurance cost for a house may be more complex.  There's also a deductible to consider before signing on the dotted line. And, like most insurance, larger deductibles may reduce the monthly premium.
What it covers
The value of the contents of the average apartment ranges from $10,000 to $30,000. Compute what you own, and you may be surprised at the total.
Most policies cover personal items such as clothing, electronics, including a TV and computer; DVDs; furniture and other items carried into the apartment, said James Taylor, of Taylor Group Insurance Agency, Chicago.
"However, if you have higher-value items such as a diamond engagement ring, Rolex watch or other valuable jewelry, a baseball collection with a valuable Mickey Mantle card or have inherited a Monet painting from Grandma," be sure those are listed specifically with the insurer or you will not get more than a set amount, said Taylor. Such coverage will add to the insurance costs.
Most renter policies cover possessions that are lost from fire, smoke, lightning, vandalism, theft, explosion, windstorm and water damage, such as burst frozen pipes. But if you live in a place that is known to flood, that must be a separate policy, according to the Insurance Information Institute.
Types of coverage
For personal property, there are two types of policies: replacement cost and actual cash value. 
If a computer is stolen, for example, a cash value policy will pay only the depreciated cost, while a replacement cost policy will pay the complete cost of a new computer. A replacement policy costs about 5 percent more.
Covering more than your stuff
The Insurance Information Institute notes that many rental policies, like homeowners insurance, offer liability protection for accidents, such as a visitor tripping on a rug. The triggered coverage helps with legal and liability cost and is the "the No.1 reason for having insurance," said Taylor.
Many basic policies offer $100,000 liability. 
Consider the liability amount, what it covers and pays, and whether you are covered inside and outside, such as in the parking lot or pool of the apartment. As a convenience, more property owners are offering insurance policies that can be purchased when a lease is signed. Those policies usually cover personal property and building damage costs but may not have a liability component.
Comparison shop
Some landlords list at least one insurance contact either in new tenant information or on websites as a courtesy. Occasionally, those listed are called "preferred partners." While there may be good reasons for working with that insurance source, a tenant usually is not required to buy from that contact.
Try to compare offers from two to three insurers to find your best deal. Many companies have websites with calculators or other estimating tools. Almost all have links to a local agent who can answer questions. For consumers, the Illinois Insurance Association operates the Illinois Insurance Hotline, 800-444-3338.
Be alert to potential discounts or other ways to stretch insurance dollars. If the building has a central security system, you may qualify for a discount. Renters with car insurance may be able to bundle policies for savings. A renter who has never filed a claim might shave a bit from costs.
Stangenes, Sharon. "Wall-to-wall coverage." Chicago Tribune. 24 July. 2011 
Posted by: Chris H. AT 02:08 pm   |  Permalink   |  Email
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