The importance
of purchasing Renters Insurance.
For those who rent, renters insurance covers damage to, or loss of, your personal property. Whether you rent from a house owner, a property manager, or a university (as a student living in a dorm), consider purchasing renters insurance. Although
renter's insurance is usually not required, it is just as necessary to have. Your landlord's insurance policy does not cover you. Not
only will renter's insurance protect your personal items, it will also give you
help with temporary housing and liability protection such as medical expenses
for people on your property or a lawyer if you are sued by someone
unintentionally injured by you. Once you determine your need for renter's
insurance, knowing your options will help you choose the best policy.
If the ceiling
in your rented property is damaged by wind or hail in a storm, of course the
ceiling is covered by your landlord. But what about your brand new stereo and TV
that was damaged? Also, while the ceiling is being fixed, do you have enough
money to immediately find another place to stay? These are the types of things
that would be covered by your renter's insurance policy. Along with personal
property coverage and living expenses, your renter's insurance policy will also
cover your liability or damage you cause to others or their property. For
example, your girlfriend comes over to visit and she slips on the ice outside
your door. The same walkway that is your responsibly to keep clear! Your
girlfriend needs medical attention and decides to sue you! Renter's insurance
can't help with your broken heart, but it will help you pay for your
ex-girlfriend's medical expenses and a lawyer.
Now that you
have decided renter's insurance is for you, there are some things to consider
when purchasing your renter's insurance policy:
1. Dollar
Amount of Coverage: This is a leading factor in the price and coverage. A
dollar amount is not placed on each piece of property, instead a fixed amount
for all of your possessions will be determined. Of course, the more coverage you
purchase, the higher the price of the policy.
2.
Deductible: This would be a leading factor to consider in the cost and how
much you are willing to pay out of pocket before your insurance kicks in.
Coverages subject to the deductible would be everything except liability
coverages, like paying for your girlfriends medical expenses.
3.
ACV(Actual Cash Value) or Replacement Cost: When the insurance company comes
to reimburse you for your stereo and TV what they give you is determined by
these factors. A basic policy will pay you ACV, which is the value of the
property at the time of loss. But, if you opt for replacement cost you will get
an actual replacement. For example, your 5 year old stereo will be replaced with
as much money as it would cost for you to purchase a new comparable stereo.
Expensive items prone to theft such as jewelry and guns, only have limited
coverage so it is wise to place these items on a separate policy. Replacement
cost is well worth the small amount more it may cost for your policy.
4. Location
and Previous Claims: If you rent in an area prone to thefts you will
probably pay more for your insurance and if you or the previous person or
neighbors have had a large amount of claims, this may raise the cost of your
policy.
Even if you
feel your personal property is not worth enough to insure, the value of having
liability coverage is well worth renter's insurance. Something to think about.
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