Insurance and Finance

Q&A: What You Need to Know About Buying Renters Insurance

By Kelsey J. Vanderschoot 6.3.19

With the cost of living in Texas ever rising, renting rooms, apartments, and homes has become a more attractive option for young adults and budding young families.

Signing a lease can provide independence without the financial commitment of buying a home. However, it does come with a certain amount of responsibility.

Many landlords require new renters to purchase a renters insurance policy before they can move into their new home. Often, this is the renter’s first encounter with any type of property insurance and thus may bring up a lot of questions.

We sat down with Shannon Gannaway, a Texas Farm Bureau Insurance Agent in Abilene, to help answer the most frequently asked questions about buying renters insurance.

Q: Why do I need renters insurance?

A: At this point in their lives, young adults don’t tend to have a lot accrued in assets. But they also don’t have the capacity to recoup losses if their belongings are stolen or damaged. This policy is great because it covers all of their stuff: furniture, appliances — if they are moveable — everything. Even down to the Q-tip and the toothpick, if you will.

Q: What does a renters insurance policy cover?

A: It covers all your personal property against pretty much all covered perils, such as fire, lightning, and — what people tend to be most worried about — theft.

Q: What parts of the apartment are my landlord’s responsibility if I have renters insurance?

A: There’s an easy answer to this: If it’s owned by you — if it’s your personal belongings — it’s your responsibility. If it comes with the home — if it’s permanently attached or part of the structure — that is the homeowner’s responsibility.

Q: What is the deductible on a Texas Farm Bureau Insurance renters policy?

A: Our policies are very simple. The deductible is either 1 percent of your coverage amount or $100. I like to keep it simple and just put a $100 deductible, no matter the content value you have or the cause of the damages.

Q: Should I choose actual cash value or replacement value when buying renters insurance?

A: Because renters policies tend to be so affordable, in a lot of ways it is kind of silly not to get coverage for replacement cost value, which would reimburse you for the full cost of replacing your damaged property. It does cost a little bit more than actual cash value, which would reimburse you only for the value of your damaged property, depreciated due to wear and tear. So I always say, “What you’re worried about is your property, so why not insure it for the full replacement cost?”

Q: How much coverage should I carry?

A: Generally, I personally will put no less than $15,000 to $20,000 in coverage. Most people will think, “Oh, I don’t know that I have that much stuff,” but when you start adding everything you own up down to the thread, I mean, clothing isn’t cheap nowadays. Electronics are definitely not cheap nowadays, and if you have tried to buy new furniture here recently, it is definitely not cheap either. Most people find that after they think about every little thing, it does add up.

Q: What is the average monthly cost of a renters insurance policy?

A: On average, you are looking at anywhere from $12 to $25 a month.

Q: Are the items in my storage unit covered even though they are not in my apartment?

A: Yes, there is an extension for contents to be covered off-premises, and a percentage of the total content coverage you have actually automatically covers content off-premises; it’s generally 10 percent.

Q: Does renters insurance cover belongings that are stolen from my car?

A: Yes. When a vehicle gets broken into and contents are stolen or vandalized, that claim is actually not filed on your auto insurance. It’s filed on either your homeowners or your renters insurance, because that’s where your contents are covered.

Q: If I do have to file a claim, what do I do and what should I expect?

A: Our claims department is open 24/7. Just give them your name and policy number, and they’ll get an adjuster on your assigned team within 48 hours to try to recoup those losses and get you a settlement to replace those lost items. You can also call your Texas Farm Bureau Insurance Agent, who can file the claim for you.

Q: If my landlord does not require it, should I still take out a renters insurance policy?

A: Yes, I do think it is a good, wise, responsible action to take to take care of the things you have and have worked so hard for.

Call your local Texas Farm Bureau Insurance Agent to schedule a meeting to discuss any more questions about renters insurance that you may have before you sign your next or first lease.

Coverage and discounts are subject to qualifications and policy terms and may vary by situation. © 2019 Texas Farm Bureau Insurance