62 KIPLINGER’S PERSONAL FINANCE^ 03/2020online in the cloud (which is some-
thing I should have done) or use an
app such as Encircle to create your list.
Once you’ve accounted for all your
items, you’ll have to decide whether
to get replacement coverage or actual
cash value coverage. The former, which
I have, replaces the items at full cost,
and the latter factors in depreciation.
Replacement coverage costs about 5%
more, but Penny Gusner, at Insurance
.com, says it’s worth it.
“You have to compare how much
you would get for your used television
or computer to how much it would
cost to replace it with something new
and similar,” says Gusner. You could
end up spending more in the end if you
go with actual cash value, she says.
Some online companies are auto-
matically giving replacement
coverage as your only option.
It’s also important to con-
sider any insurance riders
that could be available to you.
For example, my policy
offered additional home
computer coverage of
$5,000, which I added
to protect my expensive
MacBook.
In the end, I filed my
claim only to discover
that the amount of my
losses was less than my
deductible. I wasn’t sur-
prised, but I was hoping
to get something for my
troubles. I’ll definitely
start keeping an inventory
of what I have and make
sure it’s up to date. ■Why You Need a Renters Policy
L
ast fall, my worst fear as a renter
became a reality: A pipe burst in
the apartment directly above
mine, f looding my apartment. What
made the situation even worse was
that I got the news when I was out of
town visiting family. I panicked, even
though I was told the situation was
being handled. There were three ques-
tions running through my head that
weekend: How many of my belongings
were destroyed? How long would the
repairs take? And what would my
renters insurance cover?Renters insurance checkup. Ever since
I relocated to the Washington, D.C.,
area from Michigan, I’ve rented—and
had a renters policy (some apartment
complexes and landlords require ten-
ants to have one).
In general, a renters policy covers
three basics: your
lia bility, personal
possessions and
living expenses
in the event your
apartment be-
comes uninhabit-
able. The policies
typically cover
losses from a bur-
glary, vandalism,
windstorms and certain types of water
damage—which is where things get
confusing.
If my apartment had f looded be-
cause of a hurricane, I would have
been out of luck, because most rent-
ers policies don’t cover f looding that
comes from outside your building.
But a burst pipe falls into the accident
category, which is usually covered.
To file a claim, I logged on to my Lib-
erty Mutual insurance account from
my smartphone. I received text mes-
sage updates throughout the processfrom the agent handling my claim.
As with any other insurance cover-
age, renters insurance has deduct-
ibles and coverage limits that all
factor into the cost of the policy and
the amount you’ll be reimbursed. My
policy, which costs $18.50 a month,
covers $15,000 in personal property
and provides liability coverage of
$100,000 and guest medical coverage
of $1,000. My deductible is $500. The
average monthly premium for renters
insurance is about $17 a month for
$40,000 in personal property coverage,
according to Insurance.com. (If you
have auto insurance, you may be able
to get a discount of about 5% by buying
your renters insurance from the same
company.)
You may want more cover-
age, especially for personal
property, if you have high-end furniture,
designer clothes
or a lot of tech in
your apartment.
Before you
decide which
policy is best
for you, take
an inventory of
your belongings
and how much
they cost. You
can either keep
a spreadsheetMILLENNIAL MONEY Rivan StinsonPOONWAT
CHARA-AMPHAIW
ANTHE AVERAGE MONTHLY PREMIUM
FOR RENTERS INSURANCE IS ABOUT
$17 A MONTH FOR $40,000 IN
PERSONAL PROPERTY COVERAGE,
ACCORDING TO INSURANCE.COM.TO SHARE THIS COLUMN,
PLEASE GO TO KIPLINGER
.COM/LINKS/MILLENNIALS.
CONTACT THE AUTHOR
AT R I VA N_ S T I NS ON@
KIPLINGER.COM.FUNDAMENTALS^ Commentary