Wise Choices – Oregon Renter's Insurance

Renter's insurance protects your property against damage or loss, and insures you in case someone is injured while on your property. It's offered by most companies that sell homeowner's insurance.

Why should I buy renter's insurance?

Your landlord's insurance doesn't cover your personal property -- your clothes, furniture, stereo, computer, bicycle, jewelry, or anything else. Renter's insurance does. Renter's insurance also may pay for accidents that occur on your property or damage to others' property. A renter's insurance policy insurance can be an important -- and relatively inexpensive -- protection for you and your family.

What's covered?

You can purchase different levels of coverage, but there may be limits on the values of specific items covered. For example, some policies limit the amount they will pay for computers, jewelry, and other specific items. You may purchase additional coverage ("floaters") for items not covered in your basic policy. You also may want to purchase separate coverage for losses due to earthquake, flood, or other natural disasters.

How much insurance do I need?

• Estimate the value of your personal possessions. This is the amount of insurance you need to replace the contents of your home if everything is destroyed.
  
  
• Decide whether you need supplementary coverage, such as for damages from flood or earthquake. The more coverage you buy, the less you will have to pay out of your own pocket to replace property that is destroyed or stolen.
  

What are deductibles?

A deductible is the amount you will pay out of your own pocket before your insurance pays on a claim. This amount may be a percentage of the value of the actual loss, a percentage of the value of the insured property, or a specific dollar amount. For example, if your policy has a $200 deductible and your claim is $1,000, you will pay the first $200 and the insurance company will pay the remaining $800.

What's the difference between actual cash value and replacement cost?

You can insure your property in either of two ways -- the actual cash value, or the replacement cost.

Actual cash value

This coverage considers the age and condition of the item at the time of the damage or loss, and pays only what it is worth to replace it with an item of similar condition -- used.

Replacement value

This pays you the cost to replace the covered item with a comparable new item. Replacement value policies usually cost more, and may have restrictions.

What does it cost?

Other Common Questions

It's possible, but unlikely. If the loss was your fault, such as a fire from smoking in bed, the insurance company might refuse to renew your policy. If you weren't responsible for the loss or damage, your insurance shouldn't be affected.

With some restrictions, your property usually is covered wherever you are. Restrictions may include a limit on the value of property that will be covered, such as up to 10 percent of your total coverage.

If you are under 26, attending college, and living in a dorm, your parents' homeowner's or renter's policy may give you limited coverage. You will not be covered on their policy if you live in an apartment.

Yes, but find out whether your policy needs to be updated if you get a new roommate, or if all your roommates need to be named under the policy. Some policies automatically extend coverage to any resident of a policyholder's household who fits the definition of a "domestic partner." Otherwise, consider carrying separate coverage for each of the adult tenants.

Within the limits of your policy, usually any items that are "in your possession" are covered by standard renter's insurance.

Your bike is covered, but not your auto. A separate insurance policy is needed for vehicles such as cars, trucks, vans, motorcycles, and boats.

DCBS Recommends:

Be an informed consumer and shop around for the best price. Make sure you are comparing similar policies between companies, with the same deductibles and levels of coverage. When getting quotes you should have ready:

• a basic description of your property.
  
  
• the distance from the nearest fire department and fire hydrant.
  
  
• a list of any security devices in your home.
  
  
• the coverages and limits you want.
  

Ask for discounts. Some insurers offer discounts on renter's insurance if they are also your auto insurance company or if you are a nonsmoker; don't be afraid to ask about these and other discounts.

Choose the highest deductible you comfortably can afford. The higher the deductible you choose, the lower your insurance premium.

Keep a list. Keep an accurate list of your possessions, their purchase prices, model numbers,and serial numbers. Store this list and photos or a video of your possessions in a safe-deposit box or other secure site away from your home.

Reduce your chances of having to file a claim. Install anti-theft and safety devices.

Read your policy. Read your policy carefully and make sure you understand its terms. It is a contract between you and your insurance company. Don't sign it unless you understand what is and isn't covered, your responsibilities and rights, and the limits of your coverage.

Ask questions. If you have questions about insurance, call the Oregon Insurance Division at (503) 947-7984.

Remember that an insurance company's customer service track record can be as important as its price. Oregon Insurance Consumer Advocacy produces an annual index of Oregon insurance complaints. It ranks companies based on the number of complaints closed by the Oregon Insurance Division.

Wise Choices is an educational series from the Oregon Department of Consumer & Business Services. It's intended to inform Oregonians about their rights in insurance, investments and banking, occupational safety and health, building codes, and workers' compensation.

The information contained in Wise Choices is in the public domain, and may be reprinted without permission.

To receive more information on DCBS programs to protect and educate consumers, please write to: DCBS Wise Choices, PO Box 14480, Salem, OR 97309-0405.