Renters Insurance: Explanation of Renters Insurance

If you looked around at your possessions, you may not think you own very much, but start tallying up the monetary value of your property and you will be surprised. You may easily get into the thousands of dollars in personal property and it would probably be a major hardship for you to replace it all if it were destroyed in a fire or was stolen.

Your landlord has insurance for your building; however, contrary to common belief, his insurance does not extend to your personal property. Renters insurance is very affordable and will save you from the cost of having to replace damaged or stolen property.

Your liability is not covered by your landlord’s insurance either. You will need renters insurance to cover yourself from your visitor’s bodily injury and property damage. If you have a visitor in your home and he trips and falls and breaks his leg or his cellular phone, and if your negligence was the cause of the accident, you can be sued for medical bills, property replacement, as well as pain and suffering. Your renters insurance will cover costs associated with a lawsuit.

Your renters insurance premium can be as low as $10 per month. Your premium will be based on a number of factors, including:

  • If you own a lot of expensive items you will need more coverage so you can receive a higher indemnity, which will mean a higher premium. Make an itemized list including their value, receipts and appraisals, as well as photographs, so you can prove their value if you need to repair or replace the item.
  • The amount of deductible you can afford to pay. The higher your deductible the lower your premium.

The decision between an actual cash value policy (ACV) and a replacement policy will affect your premium.

Renters Insurance: Explanation of Renters Insurance
  • If you choose an actual cash value policy, your premium will be lower. If your five year old computer is damaged, you will get an indemnity that will allow you to buy another five year old computer. Your indemnity will be based on the original price minus depreciation.
  • If you choose a replacement policy, your premium will be higher. In this case, if your five year old computer is damaged, your indemnity will now allow you to replace your computer with a brand new, comparable computer.

To help you decide how much renters insurance you need, balance the cost of replacing all of your property with a premium you can afford. This will determine your renters insurance coverage. Whatever you do, don't go without it. Renters insurance is much like term life insurance; it's so cheap, and offers such great protection, that there aren't any good excuses for not having it.

Renters Insurance: What Does Renters Insurance Cover?

During the course of a day your things can get damaged or lost, but what would you do if a fire broke out and destroyed everything you own? If you are renting your home, you need coverage from events outside of your control.

Renters insurance will protect you from the costs related to property damage. The most common coverage includes protection from accidental fires and smoke damage, lightning, ice, snow, hail, sleet, frozen pipes, as well as wind, volcanic ash and lava, explosions, aircraft and vehicle damage, theft, riot and vandalism, and water damage from plumbing and appliances, electrical and air conditioning system.

A couple of other provisions in your renters insurance include coverage when you are traveling almost anywhere in the world. You are also provided alternate shelter and associated needs while your home is being repaired, and a coverage increase at the rate of inflation.

Your renters insurance will also cover you if you are sued for a visitor’s personal injury or property damage. If you are found liable, your renters insurance will cover medical bills for an injury or sickness and even funeral costs. You are also covered for attorney fees, court fees, and any judgment or settlement.

Most renters insurance quotes require riders, or addendums, for certain perils and special property, including:

  • Stolen or damaged identification, money, securities, checks, and credit, gift or phone cards.
  • Expensive items such as furs, jewelry, art, antiques, collections, flatware, firearms, electronics, entertainment systems, sports equipment, musical instruments and watercraft.
  • Damage incurred by an event happening in your neighbor’s home.
  • A liability umbrella to increase your liability coverage.\
  • Flood, earthquake and wind. Many insurance companies do not even provide coverage for these contingencies. You may need to purchase your coverage through The National Flood Insurance Program (NFIP), The Federal Emergency Management Agency (FEMA), or The Wind Pool Association. Contact your state to confirm the coverage you need for your area.

If you need extra liability coverage or riders, your premium will be more expensive. Here are some tips to bring down your monthly rate:

Renters Insurance: What Does Renters Insurance Cover?
  • Install a fire alarm, extinguishers, smoke detectors and sprinkler system.
  • Install a burglar alarm and deadbolts.
  • Have a claim-free history and combine your renters insurance with another policy, such as your vehicle insurance.

As a renter, your landlord is responsible for the maintenance of your building and grounds but he is not responsible for your personal items or your liabilities. Make sure you have renters insurance to cover all contingencies.

Renters Insurance: Who Needs Renters Insurance?

Renting a home means you have a landlord who is responsible for most things related to your home and grounds. Your landlord is not, however, responsible for your personal property or your liability.

Anyone who rents their home should have renters insurance. Even if you think you do not own much, can you actually afford to replace it if it were damaged or stolen? Also, if a visitor sustained a bodily injury or property damage while at your house, could you pay for their medical bills or your legal expenses?

As a college student, you should have renters insurance whether you live in an on-campus residence or in an off-campus apartment, that is, if you are not already covered by your parent’s insurance. You are probably going to bring your laptop, cellular phone, music, clothes, and jewelry, not to mention books and other school supplies. Typically, there is a lot of coming and going as a college student and your belongings are not always secure. Renters insurance will cover property loss or damage.

Retirees who rent their home but spend a lot of their time traveling should have renters insurance to protect themselves from a serious financial loss if their property is damaged or stolen while they are away.

Renters insurance makes adjustments for the special circumstances of a member of the military. Under normal circumstances, renters insurance only covers a person within his state; however, military personnel and their families tend to move outside of their home state and even to different countries. Renters insurance makes special accommodations for this; it will cover you wherever you move. Your coverage will also financially protect you from damages and losses incurred during your move.

If you own a dog, it is highly recommended you get renters insurance. Dogs can cause a lot of damage and also put you in a position where you are liable for an injury to a guest or his property.

Certain people qualify for renters insurance discounts, making coverage even more affordable.

  • A college student with a roommate who is home during the day.
  • A college student living in a house with several college roommates can get a group renters insurance policy for a discounted rate.
  • People who live in a gated community.
  • Retired people over 55 years of age.

Whether you rent a house, an apartment, a college dormitory, a condo or a vacation home, make sure your personal property and your liability is protected with renters insurance.

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