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<p>Thanks to tighter lending restrictions and rising home prices, more people than ever are choosing to rent rather than buy. According to the National Multifamily Housing Council, renters account for more than one third of all U.S. households. Renting can be less expensive than buying since you’re not shelling out money for things like maintenance, repairs, property taxes or homeowner’s insurance. The downside is that if something </p>
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<p>happens to your rental property, your landlord isn’t responsible if your personal possessions are damaged or lost. Having renters insurance gives you the protection you need but there are a few things you to keep in mind when buying a policy.</p>
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<h2><strong>1. Choose the Right Coverage Amount</strong></h2>
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<p>Renters insurance is designed to cover the cost of replacing your belongings in the event of an accident, theft or natural disaster. According to State Farm, the average renter has over $35,000 worth of belongings but the amount of coverage you’ll actually need depends on several factors.</p>
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<p>When you’re trying to decide on a policy amount, creating a complete inventory of your possessions can give you a more accurate idea of what you need. Make note of what the item is, when you bought, what you paid for it and how much you think it’s worth now. Once you’re done adding it all up you should have a good estimate of how much coverage to get.</p>
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<p>Keep in mind that renters insurance doesn’t just cover your personal property. Your policy should also include liability coverage, which protects you if someone is injured or their property is damaged while they’re at your home. The limits range from $100,000 to $500,000 so you’ll have to decide what amount of coverage you’re comfortable with.</p>
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<h2><strong>2. Know What Isn’t Covered</strong></h2>
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<p>Generally, renters insurance covers a wide range of circumstances but there are certain situations where you may be out of luck if you need to file a claim. Some policies, for instance, don’t include coverage for damage caused by earthquakes or floods.</p>
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<p>You may have the option of purchasing a separate policy to cover these events, depending on your insurer. When you’re shopping around for quotes, be sure to ask for a complete explanation of what is and isn’t covered before making your final choice.</p>
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<h2><strong>3. Understand the Different Coverage Types</strong></h2>
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<p>When you’re buying renters insurance, you need to decide whether to get an Actual Cash Value policy or a Replacement Value policy. An Actual Cash Value policy takes into account things like depreciation and everyday use when determining the value of damaged property. Your premiums are usually much lower with this type of policy but you won’t get as much bang for your buck if you need to file a claim.</p>
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<p>With a Replacement Value policy, depreciation and wear and tear aren’t a factor in determining an item’s worth. The insurance company pays the claim based on what it would cost you to buy a similar item at current market value. You’ll pay more for this type of policy but it may be worth it if you have something pricey that needs to be replaced.</p>
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<h2><strong>4. Bundle Your Renters Insurance Policy</strong></h2>
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<p>Bundling your renters insurance with your other insurance policies can be an easy way to save on the cost of coverage. Check with your car insurance company to see if they offer renters insurance and what the rates are. You could save anywhere from 10 to 20 percent off the cost if your insurer offers a discount for bundling services.</p>
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<h2><strong>5. Opt for a Higher Deductible</strong></h2>
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<p>A deductible is the amount you have to pay out-of-pocket before your insurance company picks up the tab. Depending on your insurance company, deductible options for a renter's policy may range anywhere from $200 to $1000. It may be tempting to go with a lower deductible since you won’t have to fork over as much cash when you file a claim, but it’s not always the right move.</p>
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<p>Choosing a higher deductible means that you’ll have to pay more upfront if something happens to your stuff, but your monthly premiums will be lowered. In the long run, the money you save on premiums could be enough to offset the expense if you do end up having to file a claim. Just make sure you have $1,000 in an emergency fund in case you need it for a deductible.</p>
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<p>One of the biggest mistakes that renters make when it comes to renters insurance is thinking they can’t afford it. The National Association of Insurance Commissioners estimates that the average monthly cost ranges from $15 to $30 a month. Keeping these helpful tips in mind can help you find the policy that fits your needs and your budget.</p>
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<p>Update: Have more financial questions? SmartAsset can help. So many people reached out to us looking for tax and long-term financial planning help, we started our own matching service to help you find a financial advisor. The SmartAdvisor matching tool can help you find a person to work with to meet your needs. First, you’ll answer a series of questions about your situation and goals. Then the program will narrow down your options from thousands of advisors to three fiduciaries who suit your needs. You can then read their profiles to learn more about them, interview them on the phone or in person, and choose who to work with in the future. This allows you to find a good fit while the program does much of the hard work for you.</p>
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<p>To read the full article, <a href="https://smartasset.com/mortgage/top-5-tips-for-buying-renters-insurance">click here</a>.</p>
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