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The Top Four Questions and Answers about Renters Insurance
Did you know that the insurance your landlord holds will only cover the actual building in which you live? Many renters do not realize this, and they think that they have nothing to worry about. However, when you rent your home or apartment, you could suffer great financial strain from two fronts: losing your personal belongings and being liable to damage to others’ properties. Renting your residence is not as simple as it may seem. You will need to make sure you are properly covered by renters insurance.
Most likely, you have a few questions, especially if you have never considered the type of coverage before. In order to thoroughly understand the insurance and the importance of it, you need to make sure your questions are answered. You will be able to gain a great deal of knowledge from the four questions and answers below. These four are the most commonly asked inquiries concerning renters insurance.
1. What is the difference between renter’s insurance and what the landlord holds on my location? As mentioned above, there is a big difference between these two coverages. The insurance your landlord holds only insured the property and the building itself. This is true whether you rent a house or an apartment.
The policy that you need to take out as renters insurance does not cover the building itself. Instead, it will cover the belongings within, like your furniture, your clothes, your dishes, and anything else you keep in your home. Without renters coverage, if you were to lose everything due to a fire, you will not be able to get anything back.
2. What kind of damage will the renters policy cover? This is a very important question. The types of damage are referred to in policies as perils. While different insurers and different policies can include different exclusions and inclusions of perils, but there are a certain set of standards. Generally, the coverage will take care of damage from theft, vandalism, fire, lightning, smoke, and flooding from water pipes.
Think about this, if you live in an apartment building, you are not just running the risk of loss from a peril that started in your apartment. You also have to consider that if any of the other apartments or tenants lead to damage like fire, you could lose your belongings as well.
3. I have to choose between actual cash value and total replacement policies. Which is better? As with almost anything, there are positives and negatives to each type of coverage. Let us, for a moment, consider each.
Actual cash value policies are by far the lowest priced option for insurance. If you need a low monthly premium, you will find it here. However, there is a downfall. If your items are stolen or destroyed, the insurance will only reimburse for the value of the items at this time. For example, if your television set is three years old, you will only get the money that is the value of a three year old television set, which may not be that much.
Total replacement will require a significantly higher premium, which may be hard on your budget. However, in the event of damage or loss, the policy will pay to replace the items with new ones of the same type. That three year old television would be replaced with a brand new one of like make and model.
4. How much insurance coverage should I get? In a way, this decision will be left up to you. You will need to consider everything you own, including clothing, electronics, books, movies, and anything else. You can either use an estimate calculator or add by hand. Either way, you will have to choose how much coverage you get, just be sure you take all of your property into consideration.
Do not make the mistake of thinking that your landlord has enough insurance. That coverage is only for the building. You will need to make sure you have coverage for all of your belongings as well as liability coverage for any damage you may cause to someone else’s property. Choosing the proper renters insurance is the responsible and safe thing to do for you and your home.
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