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Do You Need Renters Insurance in NYC?

Let's face it: Insurance is annoying. You pay to cover yourself in case an accident happens and when it doesn’t you are tempted to forego it.

But, before you think nothing will happen and you’ll take the chance to go without renters insurance, it’s important to debunk a couple myths.

Myths and truths

Myth No. 1: My landlord’s insurance will cover any losses I experience.

Wrong. Your landlord’s insurance typically covers the building only. It won’t cover replacement of your possessions, especially if those losses come as a result of some of the most common hazards: fire, lightning, windstorm, explosion, building collapse, vandalism, theft and many types of water damage.

Myth No. 2: My roommate has renters insurance, so I don’t need it.

Wrong. You won’t automatically be covered by your roommate’s insurance unless you’re actually listed on the policy. A maximum of two unrelated people can be on a single policy, so additional roommates will need to buy their own insurance coverage. Also good to know:  It doesn’t matter if they’re on the policy, theft or intentional damage by a roommate generally is not covered by insurance.

Myth No. 3: I don’t have enough stuff to justify the cost of renters insurance.

Wrong again. According to the New York-based Insurance Information Institute (III), an average renter’s possessions are worth more than $20,000.

“It’s easy to think that figure is high, but when you start calculating how much you paid for your computer, TV, tablet, stereo, furniture, clothing and jewelry, you realize it adds up pretty quickly,” said Brad Hilliard, spokesman for State Farm Insurance Cos. “If you don’t have insurance, trying to replace those items could be financially crippling.”

What does renters insurance cost?

Renters insurance generally costs $150 to $200 per year, depending upon the coverage and deductible. It’s important to know that renters insurance can do more than just replace lost or stolen items. It can also cover living expenses if damages make your rental unlivable. Policies vary, but many will reimburse you the difference between the additional living expenses and your normal ones. Most policies also include about $100,000 worth of liability coverage, protecting you if you accidentally damage your landlord’s property or if someone falls and is injured in your home and sues you.

If you think renters insurance might be worth the investment, there are a few additional facts you should know:

  • Some policies provide coverage on an “actual cash value” basis, which means depreciation is figured in. If your 12-year-old plasma television is stolen, you’re not going to get more than a few bucks for it. If, on the other hand, your policy provides coverage on a “replacement value” basis, the insurer will pay the amount it would cost to replace your TV with one of the same kind and quality as the original – in today’s market.
  • Renters insurance does not cover damages caused by flooding or earthquakes, but separate policies can be purchased to guard against those types of disasters.
  • Renters insurance is easy to get. Most companies allow you to apply online.
  • If cost is a concern, you can call an agent to talk about ways to lower your premium. Some companies, for example, offer discounts if your apartment has smoke detectors, a security system or sprinklers.  Having a higher deductible also will lower how much you pay for renters insurance by shifting a portion of loss payments to you. For example, if you have a $500 deductible, you’ll pay the first $500 of a loss out of your own pocket. Renters insurance deductibles generally range from $500 to $2,000. If you choose a low deductible, you’ll recover more money if you file a claim but the cost you pay for insurance will be higher.
  • Renters insurance policies place limits on coverage for jewelry, often $1,000. If it would cost more than that to replace your jewelry you can buy a floater or endorsement that provides additional coverage. This type of coverage can also apply to collectibles, musical instruments or sports equipment.

Do an inventory; determine how much it would cost to replace your things if you were robbed or your place caught fire. Remember that, while you might never smoke in bed or fall asleep with the tub running, you can’t be sure how careful the tenants in nearby units may be. Above all else, do your homework before you decide whether to roll the dice with your possessions.

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