Moving to a brand new home is quite stressful and the majority of people think about setting up the phone, cable television and internet, but overlook content insurance. Normally, your landlord will have an insurance policy, but what the majority of people tend not to realise is that it covers only the building, not your personal belongings. If you need a peace of mind knowing the content of your home is covered by insurance, you need renters insurance. It can be very costly to replace your valuable belongings or defend yourself against liability lawsuit.

HO-4 and HO-6 are the two basic kinds of home content insurance. The former is for renters and the later for condo owners. Burglary, fire, vandalism and smoke are some of the things these insurance policies will protect you against. Earthquakes and floods, however, are not automatically included in renters insurance. Such cover can be purchased separately or added to your policy at extra cost, obviously.

A couple of important factors about renters insurance are “actual cash value” (ACV) and “replacement cost coverage”. Without a doubt, you can very easily guest what these terms mean, but lets explain them in brief. If you bought a laptop for $600 a couple of yours ago and it gets damaged today, ACV will be much lower because the item has lost some of its value. Replacement cost coverage, on the other hand, will pay as much as its required to buy an equivalent laptop today.

As you can imagine, replacement cost coverage is costlier. The most important thing is to know which insurance coverage you want and which one you are quoted for before purchasing your insurance policy.

If you have high value items, you will be required to state them separately on your insurance policy. Such items include antiques, diamonds and electronic devices. Obtaining receipts for all the high-priced items could be beneficial, and why not even take a few photographs or make a video.

If your home is ruined - what happens?
In case your place of residency becomes unliveable due to fire or smoke, your renters insurance policy will cover your “additional living expenses” (ALE). You may need to temporarily live in a hotel or another apartment within the same price range. There is a limit to the amount ALE can cover, obviously, and that limits is usually 30%-40% of the total value of the insurance policy. There is also a limit for the period of time for which additional living expenses cover is valid and that’s usually twelve months.

Renters liability cover is another typical benefit. What does renter’s liability cover, you may ask? It covers you in case a person gets injured in your apartment and decides to take legal action against you. This part of the insurance policy, as you may guess, has limits as well - do keep them as high as you can as lawsuits are expensive!

OK, what can I expect to pay for home renters insurance?
The truth is that it really depends. Credit history, occupation and age group, together with the factors described above, play an important role when insurance premiums are calculated. To discover exactly how much it is going to cost you, you need to compare insurance quotes from different insurance providers. Don’t rush to go with the lowest priced quote you get. You should definitely take a look at the limits and type of cover included in your insurance policy.