NYC Renter’s Insurance Explained:3 Commonly Asked Questions

Many people don’t think about renter’s insurance until it’s too late. If you’re about to rent or are currently renting an apartment in NYC, getting an insurance policy is one of the first things you should do. This article helps explain why.

When disaster strikes, having renter’s insurance can really save the day and help you get back on your feet fast. Yet there are still some people out there who (both literally and figuratively) don’t get it. Renter’s insurance is the insurance that covers a tenant’s belongings in case of events like fire or theft. If you’re currently renting or will be renting an apartment in NYC, consider the following information. Even if you get just a little, it may make all the difference in your life if and when you really need it.

Question #1: What’s the worst that could happen without rental insurance?

Let’s say you have two renters who live in the same building. Jane has an insurance policy worth about $40,000. When a fire raced through her apartment complex, everyone got out safely, but the damage to the property was severe. The fire destroyed Jane’s laptop, smartphone, high-end furniture, and big-screen television. Her insurance company was there with a check covering all of her losses, and it also paid for her to live in a hotel and all of her living expenses while she looked for a new place to live. She was set up in a new home in no time, and every single one of her damaged items were replaced with new ones. Her neighbor, Rebecca? She lost everything as well, but she had no insurance. No one showed up with a big check, and Rebecca had to couch-surf until she made the decision to move back to her parents’ home in Ohio so that she could start over. Sound cheesy? This scenario actually happens. Getting renter’s insurance should be a no-brainer.

Question #2: How much insurance should you take out?

When you fill out your renter’s insurance application, you’re going to be asked how much you want to take out. Think of every single thing that you own and how much it would cost you to replace it all. The average amount of a basic insurance policy is about $12 per month for a $30,000 policy, but many people need more. Think of your electronics, your furnishings, your wardrobe, everything.

Question #3: Should you get an actual cash value or a replacement cost policy?

Rental insurance policies are offered as actual cash value (ACV) or as replacement cost value. People who are trying to save money may go for an ACV rental insurance plan as opposed to a replacement cost plan. With an ACV plan, the insurance company will pay you what your property was worth at the time it was stolen or damaged. That means that if that gorgeous flat screen TV you bought four years ago for $5000 is only worth $400 today, you’ll get a check for $400. With a replacement cost policy, you’d get a check for the amount of money you’d need to replace the television. It’s easy to see why most people should at least consider a replacement cost policy. It may cost a bit more, but you’ll be happy you paid for it if you ever need it.

Image Source: Flickr/Alan Cleaver

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