For many people renting apartments in New York City, renters insurance is in the back of their mind as something they should have but haven’t gotten around to yet. There’s no blanket rule or law requiring that you purchase a policy for your apartment, and many renters assume their stuff will be covered by their landlord’s policy if anything goes wrong in the building. Here’s some bad news: if anything damages your personal property and you don’t have renters insurance, you’ve lost it for good. The good news, though, is that protecting your stuff through renters insurance is fairly easy and not that expensive. “Most people don’t realize it’s inexpensive and widely available,” said Jeff Schneider, president of Gotham Brokerage. Gotham Brokerage specializes in renters and apartment insurance, but Schneider says that every insurance company offers it. Once secured, renters insurance will protect you from three things: coverage for personal possessions, liability protection, and additional living expenses.
The first concern of securing renters insurance tends to be cost. But Schneider insists it’s not that expensive: “You can get minimum coverage for under $200 a year,” he said. Renters coverage starts as low as $125 a year. Essentially, what you pay for a policy is based on the value of your belongings. The higher your property value, the higher your renters insurance, and visa versa.
Standard coverage levels for property damage range from $25,000 to $50,000, although it can go higher. The policy will also come with a deductible, what you’ll pay out-of-pocket before the insurance coverage kicks in. Your policy will offer deductibles of a specific amount, typically from $500 to $2,000. The larger the deductible, the lower the premium charged.
So before you secure a policy, you’ll have to take stock of all your stuff. The easiest way to determine the value of your personal possessions is by creating a home inventory. Track your furniture, clothing, books, electronics, appliances, kitchen utensils—pretty much everything you own that didn’t come with the apartment—and mark its estimated value. Schneider says the best way to to do this is by taking photos of your stuff and keeping track of credit card statements. (Here’s a free home inventory site that will help you out.) Keeping this list up-to-date will also make it easier to file an insurance claim in the future.
Once you’ve taken stock of your personal inventory, you’ll decide what kind of policy you want. There are two kind of coverage: replacement cost coverage or actual cash value coverage. Actual cash value considers what your items are worth including depreciation, not what you bought them for. A replacement cost policy will pay the cost of replacing your possessions without accounting for depreciation. Schneider recommends the replacement cost policy, despite a slightly higher price uptick of about 10 percent. It’s considered worth the extra expense as the value of most items tends to depreciate quickly. That MacBook you bought two years ago is now worth significantly less than what you paid for it.
Once you’ve secured your policy, your insurance will protect you against losses from fire or smoke, lightning, vandalism, theft, explosion, windstorm, and certain types of water damage. If there’s damage from a burst pipe, you’re covered. But if you live in a flood zone, note that most renters insurance policies do not cover floods. (Flood coverage comes from the federal government’s National Flood Insurance Program and a few private insurers.) Earthquakes typically aren’t covered. Sometimes jewelry, or electronics used for business purposes, will not be covered. It pays to do your research here to know exactly what your policy accounts for. There’s always the option to add a “floater” to your policy in the case of expensive jewelry, collectables, or equipment. The floater provides additional insurance for valuables and also covers them if they are accidentally lost.
On top of coverage for personal possessions, renters insurance comes with liability coverage usually up to $100,000. Basically, this will cover you against lawsuits for bodily injury or property damage done by you, your family members, and even your pets. If you’ve caused a leak that damages your neighbor’s apartment, your neighbor’s damage is covered by your policy. Some policies will refuse to cover dogs, especially certain breeds, not wanting to be liable if your dog bites a stranger. Or, your premium will be higher with certain types of pets. And most policies will not cover anything that happens under a sublet or if someone is renting your place through Airbnb.