I’m not your mother, so don’t ignore me when I say: You really, really need renters insurance. Maybe you think that you don’t own anything nice enough to warrant protection over its potential theft or damage, which is understandable. But unexpected, freak accidents do happen. Remember the East Village gas explosion? Or what about Hurricane Sandy? Those are both extremes, but, God forbid, if something similar happened to you and you’re not insured, the costs could be tremendous.
Here are the basics on what you need to know about renters insurance.
Why Get Renters Insurance?
Renters insurance is an inexpensive precaution that can end up saving you thousands of dollars down the line. It covers personal property damage or theft and protects you from potential liability. For example, if you accidentally leave the sink on and flood both your own apartment and your neighbor’s apartments, renters insurance would cover the damage to both of your belongings and future liability (e.g., mold resulting from the water damage).
What Does It Cover?
Renters insurance protects your possessions from damage or theft, but the extent of coverage depends on how much personal property and liability coverage you need. There are typically two types of insurance policies: the less expensive actual-value coverage, which covers the depreciated value of your stolen or damaged belongings, and the pricier replacement cost coverage, which provides you with enough money to purchase a brand new replacement. Many policies even cover your belongings when they’re not inside your apartment; meaning, if your bike is stolen from its parking spot outside of a friend’s apartment, you can be reimbursed for the cost of the bike.
Renters insurance can also provide liability protection, meaning if someone is injured in your apartment (e.g., bitten by your dog), the insurance policy may pay for any legal or medical bills related to the incident.
How Much Does It Cost?
Renters insurance is the least expensive type of insurance. That being said, there are several factors that affect how much your renters insurance will cost, including the degree of coverage you need (i.e., your assets and risk factors), the type of coverage you choose and the location of your apartment.
Typically, a policy including liability protection and protection against common “named perils” will range between $5 and $40/month. Named perils are the incidents specifically outlined on your policy, so keep in mind that you will only be covered for those events. Some common named perils included in renters insurance policies are water damage, fire/smoke damage, vandalism and theft.
What is Not Covered in Renters Insurance
Usually, natural disasters such as flooding, hurricanes, earthquakes, wildfires and sinkholes are not covered by renters insurance. That’s why if you live in a flood-prone area of NYC, you should consider flood insurance. How do you know if you are in a flood-prone area? Via this very user-friendly website by the City of NYC named Flood Help NY. Just plug in your address and it will show whether you are at risk. Here’s an example of a building in the Rockaways that is in a very high risk zone:
How Do I Find the Best Renters Insurance?
The best way to find an insurance policy to fit your needs is to shop around and compare quotes. Ask your friends if they have renters insurance and if they’re happy with their provider, and do some of your own research online. According to a 2015 J.D. Power survey of 14 major insurance companies, consumers were happiest with Erie Insurance, American Family, Nationwide, State Farm and Progressive. While the survey did not include smaller and regional insurance companies, these companies are also likely to have high quality service and competitive rates. Gotham Brokerage, for example, is a regional insurance company whose service has garnered itself a five-star Yelp review.
For flood insurance, coverage is available from the National Flood Insurance Program (NFIP) and a few private insurers.