How Does Renters Insurance Work When I Need It?

Fran Majidi
April 12, 2019

You’ve brushed up on all the ways renters insurance is important (or not, in which case visit here), and you’ve learned that the most important part of having this type of coverage is ensuring that you get the proper amount of money back if something does actually happen and you need the money. Far too often, we spend so much time debating whether or not we need renters insurance (you always need it) and then spend no time creating an inventory of our stuff to prove that we deserve to be reimbursed for damages and destruction after a catastrophe strikes.

First, it’s important to know that renters insurance is meant to cover all your personal belongings. As you can imagine, the insurance company is not going to take your word for how much they owe you if, say, a flood destroys your $5,000 bed! Or that Birkin bag ($11,000) and laptop ($2,000). How do you give proof of your losses after all your stuff is destroyed?

Remember that your policy will only cover your things up to limits, which includes one total limit and limits on individual items. Your things may fall into categories like jewelry, art, and electronics. Say your television and laptop both get stolen -- you may not get reimbursed completely if they are worth more than your limits on electronics. However, you can buy a rider or floater for extra coverage if you know that’s the case. That’s why it’s important to not only buy your renters insurance but to make sure your things will be covered within the limits you set.

Will I Get Back What I Paid for My Belongings if Something Happens?

A replacement cost value policy will probably come closer to getting you back what you lost but it does cost more than an actual cash value policy, which will only bring you back what your missing or destroyed item would be worth today. Regardless of which type of policy you buy, you have to price the value of your belongings in order to get paid for them.

How Do I Create a Renters Insurance Home Inventory?

This part is very important but the way you go about it doesn’t really matter. You can use a paper and pencil if you want, as long as the information is verifiable. Many people use Excel sheets and Millennials tend to opt for one of many available home inventory apps out there. You’ll want to avoid bloating numbers in hopes of a bigger return. Most insurance carriers have processed claims just like yours and it will only work to your disadvantage if you’re caught making up figures. In fact, if you do so aggressively, you may raise red flags for insurance fraud, not a pretty charge at all.

You’ll need to price your items online, in person or what have you, but have sourcing for your prices. If you have rare or especially expensive items, you will want to have those items appraised to avoid having a conflict with the insurance company about their worth after filing a claim.

Whenever possible save serial numbers for your belongings. Keep receipts and take lots of pictures of everything in your inventory.

Do I Create a Renters Insurance Home Inventory Before or After I Buy Insurance?

Ideally, you will do it before, but if you already have renters insurance, we suggest that you create an inventory and make changes to your account based on whether or not you need to increase your limits. You may want to make sure you are getting the best rate, especially if you need to increase your limits.

What if I Don’t Have a Home Inventory for My Renters Insurance?

For one thing, you may not remember everything that got destroyed and you won’t be compensated for it either. Think about what kind of damage a really bad water leak or fire will do. Your things may become unrecognizable and you may not list everything properly when you start the claims process. Or worse yet, what if the insurance company requires proof of ownership? They often do when it comes to pricier items. An inventory gives you proof of ownership, especially if you have things like a serial number to an iPhone. Some items are covered on an honor system but the more expensive or rare the item is, the more careful you need to be about pricing, photographing and cataloging.

Creating a Home Inventory for Renters Insurance

It’s not that hard to create a pretty thorough home inventory. All you have to do is follow these steps:

  • Take photos/video. Go from room to room and take photos of what you’d like to be compensated for if everything in your home were destroyed. When applicable, take close-ups of serial number. A photo of a serial number is more useful than a note about it.
  • Give a value to each item. If you remember what you paid for it, write that down. Hopefully you’ll also have a receipt to go with it. If you don’t have a receipt or can’t remember how much you paid for it, look it up online and jot down the price.
  • Add receipts/appraisals. If you have very valuable items and no documentation for what you paid for it or what it’s worth, you may have trouble recouping a loss so look for anything that may help. A renters insurance claim without receipts may still be honored but it’ll be hard to fight for top dollar without them.
  • Save on cloud. Make sure to save photos and copies of your inventory and receipts to the cloud.
  • Revisit your inventory. Whenever you make a big purchase, add on to your existing list. Revisit your documents every six months or so to make sure you have a thoroughly updated listed.

Alternatives to Creating Your Own Home Inventory

Some of these apps will even pull information on pricing for you. All you need for most of these apps is an Android or iOS. The following are considered to be some of the best home inventory apps out there:

Most Importantly, make sure you’re with a top-rated insurer. When you find an agent through SmartFinancial, you’re guaranteed to be working only with the most knowledgeable licensed agents in your area.

Get a Free Renters Insurance Quote.

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