Far too many people in Arizona who rent apartments believe that their landlord’s insurance will cover the cost of replacing their belongings in the event of loss or theft. In most cases, the landlord will only get reimbursed for the cost of the structure, not any tenant belongings. That’s why people renting a home, condo, or apartment are strongly encouraged to get renters insurance.

Renters insurance is a low-cost insurance policy that covers almost all personal effects inside a building, and often liability in case a visitor gets injured. However, not everyone can get renters insurance. Some companies often reject applicants in group housing situations or in the event of double coverage as in the case of a renter’s parents already having insurance on the belongings. College students may find it hard to obtain insurance for off-campus housing and those in dorms are often rejected out of hand because of the increased risk of horseplay and theft.

Young married couples and people with few valuable items are the best candidates for renters insurance. If someone has something worth over $5,000 USD, insurers recommend buying additional coverage, called a rider, that will cover the more expensive items. One note of interest, personal vehicles are usually not covered.

Read the section about your payout policy carefully. You will be offered either actual cash value (ACV) or replacement cost. An ACV will have a lower monthly premium, but will only pay the original price of the item lost, damaged, or stolen. For example, if you buy a refrigerator for $1,000 and ten years later it is lost in a fire, the insurance company will only give you $1,000. With a replacement cost payout, you will receive whatever it costs to buy a new refrigerator. Choose your coverage carefully.

Contact your insurance agent for help understanding what is and what isn’t covered in your renters insurance policy.