6 Renters Insurance Mistakes (and How to Protect Yourself)

So, your new renters insurance policy arrives in your inbox, and you quickly skim through it, promising yourself that you’ll read it thoroughly…later. Ignorance is bliss until it comes back to bite you when you least expect it. Imagine having to tell your friends that you can’t replace your stolen bike because you missed a deadline for your claim, or worse, having to start a GoFundMe to replace items after a fire because you didn’t have enough coverage. Luckily, our insurance experts at Goodcover have seen it all and are here to spill the tea on the most common renters insurance claim mistakes so you can avoid them. 

This guide won’t get into the details of filing claims (you can find that information in Goodcover’s quick claim guide). Instead, we’ll focus on empowering you to be proactive so that you can confidently understand your coverage and be sure your renters insurance actually does what it’s supposed to do – protect you.

Mistake #1. Skimming Your Policy

You've got the policy, that's all that matters, right? Wrong. You might assume you're covered for certain perils or losses, only to later find out from your insurance company that you're not. 

So, what does renters insurance typically cover? It's designed to protect your belongings and liability in case of unexpected events. Here are the main types of coverage you'll usually find in a renters insurance policy:

• Personal Property Coverage: This covers your belongings (furniture, clothes, electronics, etc.) if they're damaged or stolen due to a covered peril, such as fire, theft, or vandalism.
• Liability Coverage: This protects you if someone is injured in your rental unit or if you accidentally damage someone else's property. It can help cover medical expenses, legal fees, and other costs.
• Temporary Housing Coverage: If a covered peril makes your home uninhabitable, this coverage helps pay for additional living expenses like hotels, meals, and other living expenses while your home is being repaired or rebuilt. This is also sometimes called “loss of use coverage.”

All renters insurance policies have exclusions – things they won’t cover – and it can vary based on insurer and location. For example, most renters insurance policies exclude flood damage and earthquake damage. If you live in areas prone to this type of disaster, you’ll need additional coverage (flood insurance or earthquake insurance) for that. 

Goodcover has seven exclusions in our renters insurance policies.

How to Avoid It:

Don't just skim your policy; read it thoroughly. Policyholders should pay attention to what's covered, what's not, and the coverage limits on each category. Make sure you understand terms like:

• Deductible: The amount you pay out of pocket before insurance kicks in.
• Actual Cash Value (ACV): The “thrift store” value of your stuff. ACV is the value of your stuff after accounting for depreciation (wear and tear).
• Replacement Cost Value (RCV): The cost to replace your belongings with new items of similar kind and quality. 
• Water/Sewer Backup: This optional coverage protects against damage caused by backed-up water or sewage.

If anything is unclear, Goodcover’s Member Experience Team is here to help you understand what your policy covers. Contact us.

Mistake #2. Underestimating The Value of Your Stuff

It’s easy to underestimate how much your personal belongings are worth, but even everyday items like clothes, furniture, electronics, and kitchen appliances add up fast. If you don’t have enough coverage, something like fire or theft could set you back financially. You’ll be stuck paying the difference to replace your damaged items out of pocket – a setback that could derail your savings goals or even put you in debt.

How to Avoid It:

A home inventory is your key to getting the right amount of coverage. Here’s how to tackle it:

• Make it thorough: Go through each room and take a video, then make a list every item you own. If that’s overwhelming, start with everything over $250. Estimate the value for each item, or find receipts for the most accuracy.
• Use tech to your advantage: There are plenty of online tools (like Google Sheets) and apps that can help you create and maintain a home inventory. Some even let you scan barcodes or upload photos for easy tracking. 
• Choose adequate coverage: Goodcover offers Replacement Cost Value (RCV) coverage, which means we’ll replace your items with new ones, regardless of depreciation. This can be a lifesaver in the event of a total loss. Be sure to select a coverage amount that reflects the amount you reached in your inventory calculations.

By accurately calculating the value of your personal belongings, you can ensure that your renters insurance will actually cover the cost of replacing all your stuff. 

Mistake #3. Procrastinating on Claims

Life gets busy, but when it comes to renters insurance claims, time is of the essence. Most states have strict deadlines for filing claims – and it’s your duty to report your losses promptly. If you wait too long, your claim could be denied, leaving you to bear the financial burden of the loss.

Say you notice a small leak in your bathroom ceiling, but you're too busy to deal with it right away. Weeks later, the leak gets worse, causing significant water damage. When you finally file a claim, your insurer may deny it because you didn’t take proper steps to prevent further damage when you first noticed it.

How to Avoid It:

Don't delay reporting incidents to your insurer. The sooner you report a loss, the sooner they can start processing your claim. It doesn’t take long to file a claim, so do so ASAP.

Mistake #4. Forgetting to Document

When disaster strikes, your memory can be hazy. Without proper documentation, it's difficult to prove what you owned and the extent of the damage, leading to potential disputes and lower payouts.

If you’re on vacation when a burglar breaks into your apartment and steals your stuff, you might not be able to remember every single thing that was taken. If you don't have any receipts or photos to back up your claim, your insurer could offer you a settlement that's less than what your belongings were actually worth.

How to Avoid It:

To avoid this mistake, you have to show the receipts – literally. If you’ve been following this guide, you’ve already created a home inventory to document your stuff, so you’re ahead of the game. Level it up by adding photos or videos and any relevant receipts. Store this inventory in a safe place, such as the cloud or on an app. Keep receipts for big-ticket items and any recent purchases. If something happens, take photos or videos of the damage before you start cleaning up. This way, you’ll have solid proof of what you owned and what was damaged or stolen, making your claims experience much smoother.

Mistake #5. Stretching the Truth (Or Flat-Out Lying)

Filing a fraudulent claim might seem tempting if you're desperate for cash, but it's a terrible idea. Insurance fraud is a serious offense that can result in denial of your claim, policy cancellation, and even legal consequences.

How to Avoid It:

Be honest and accurate when filing a claim. Don't exaggerate the value of your belongings or the extent of the damage. Remember, honesty is always the best policy.

Mistake #6. Ghosting Your Insurer

Your insurer is not your ex – so don’t ghost them. They might need additional information or documentation to process your claim. If you don't respond to their requests promptly, your claim could be delayed or denied.

For example, say your claims adjuster asks for proof of ownership for a stolen item, but you're busy and forget to send it. Your claim could get put on hold, and you'd be left waiting for reimbursement while your insurer tries to contact you for more information. 

How to Avoid It:

Be responsive and communicate promptly with your insurer. Answer their questions, provide any requested documentation, and keep them updated on the progress of your claim.

Conclusion: 

By avoiding these common mistakes, you can ensure that your renters insurance serves its purpose – protecting you and your belongings when you need it most. The more you understand your policy and the claims process, the better equipped you'll be to navigate any unexpected events that come your way.

So, don't wait until disaster strikes. Take a proactive approach today:

• Review your policy: Dust off that renters policy and give it a thorough read. If you’re a Goodcover Member, you can find this information in the Member Dashboard.
• Update your inventory: Create or update your home inventory to ensure you have adequate coverage.
• Ask questions: If you have any doubts or concerns, contact us.

Taking these simple steps can make all the difference when it comes to protecting your peace of mind and your hard-earned belongings. If you’re not a Member yet, why wait? Get a fast, free Goodcover renters insurance quote today.

Note: This post is for informational purposes; insurance regulation and coverage specifics vary by location and person. Check your policy for exact coverage information.

For additional questions, reach out to us – we’re happy to help.