Spend now or save for later? It’s an age-old dilemma that hits closer to home now more than ever. While deciding against buying a 4K television or postponing your Hawaiian dream vacation can be sound financial decisions, one corner we suggest not cutting is purchasing renters insurance. Show
Imagine coming home from work to find your apartment broken into and completely ransacked—gone are your expensive stereo system and fine china. Or even worse, suppose you return from a long weekend only to discover there was a fire in your kitchen. You can’t assume your landlord will pay for your damaged or lost possessions. In fact, you can probably assume they won’t. You’ll need a renters insurance policy to help recoup your losses. Unfortunately, renters insurance often falls under the radar. Approximately 80% of renters do not carry renters insurance. That’s a staggering number considering a typical policy only costs between $150 and $300 a year—depending on where you live. For this reason alone, renters insurance is an excellent idea for anyone who rents a house, apartment, condo or other home. How Much Coverage Do You Need?The first step in purchasing a renters insurance policy is adding up the cost of everything you would want to replace if it were damaged or stolen—including clothing, electronics, furniture and appliances. Write down the serial numbers of appliances and electronics. In case of a fire, keep a copy of the list somewhere outside your home (at work, perhaps). You also may also take photos or make a videotape of your most valuable items. That will make it easier to make a claim on them if they are lost or stolen. (Read more about how to create a home inventory here.) Something else to take into consideration is “actual cash value” (ACV) or “replacement cost coverage” for your belongings. As the name implies, ACV coverage will pay only for what your property was worth at the time it was damaged or stolen. With an actual cash value policy, if a tree falls through your window and destroys your computer that cost $2,500 when it was new four years ago but is now only worth $1,000, you will only receive $1,000 (minus your deductible) for the damaged item. Replacement cost coverage, on the other hand, will pay what it actually costs to replace the items you lost. Replacement cost coverage will cost you more in premiums, but it will also pay out more if you ever need to file a claim. What Else Is Covered?
Loss of Use/Temporary Housing will cover you if your home or apartment is rendered unlivable by a fire or other disaster. Generally, this coverage provides temporary relocation housing while your residence is repaired or rebuilt. Car Interior – Many renters insurance policies also cover possessions that you keep in your car (CDs, books, portable computer equipment). Note that the car’s value itself is not covered, and typically installed stereo equipment (which is often considered “part” of the car’s systems) is not insured either. What’s Not Covered?Earthquakes, flood and landslide protection are not commonly included on rental insurance policies. If you live in an area where these natural disasters are common, coverage for your personal possessions lost in one of the aforementioned occurrences must be purchased as add-ons or via separate insurance policies altogether. Getting Started
The above is meant as general information and as general policy descriptions to help you understand the different types of coverages. These descriptions do not refer to any specific contract of insurance and they do not modify any definitions expressly stated in any contracts of insurance. We encourage you to speak to your insurance representative and to read your policy contract to fully understand your coverages. By Chris McLaughlin
Frequently, tenants tend to think that everything’s covered once they settle in their rented home. They forget the importance of renters insurance. They forgo purchasing insurance for their rented apartment or rental home. Renters often think it is not essential. There’s a misconception that it is expensive and they start to ignore the importance it would give them in the future. Renters insurance is an inexpensive type of insurance and very easy to avail. It protects you from unexpected events that go out of control. Certain events like fire and theft can cause extreme damage and loss to your personal property. Let’s discuss renters’ insurance for a better understanding of what it is and its importance. What is Renter’s Insurance?Renter’s insurance is a.k.a. tenant’s insurance. It pertains to the insurance policy that protects the tenant from certain perils that might affect his or her personal property. The owner of the home you are renting is liable for the whole building or property. You, as the renter, are responsible for your personal belongings. The owner would not be accountable for the loss and damage to them. What Does It Cover?Renter’s Insurance aims to PROTECT you. In the event of a loss due to theft or fire, renter’s insurance will replace damages. Your personal belongings even if the loss happened outside your rented home. Its coverage types are: Personal property coverage. This covers your personal belongings by replacing them and for the repair cost of your valued stuff up to your coverage limit. Liability coverageThis covers the damages to others’ property or injuries sustained by someone inside your apartment. You may need to rent a hotel if your apartment got destroyed by fire or another disaster. Your renter’s insurance will pay for the additional costs to maintain your standard of living. What Are The Things To Consider?The amount of coverageBuying renter’s insurance covers determined possessions. You’d be needing different coverage which you see fit for what you need. More coverage means the higher price of the policy you are going to purchase. DeductibleThis would play a big part in deciding the cost of your policy. Your insurance kicks in once you have shed the money out of your pocket. Actual cash value or replacement costWith actual cash value, lost or damaged possession would be paid the amount at its present cost. Normally, an item gets depreciated as the years pass.
LocationAn area prone to theft and other disaster incurs a raise in insurance costs. This would indicate frequent claims especially if the place has previous claim reports because of these causes. Expect a higher price on your policy. Why Is Renter’s Insurance Required?Landlords require renters insuranceIf you will ask if it’s mandatory, the answer is no. But landlords have the legal right to require you to purchase renter’s insurance as part of your lease agreement. The reasons behind this are sensible as it only protects the business of the owner. It may include protection against lawsuits in an event of personal property loss of a tenant. The property owner also wants to ensure that you are well-covered to protect his investmentAn event of loss or damage might push you to find another place if you don’t have the means to shoulder the expenses. The owner then would have to find another tenant. If you are insured, once a break-in or incident happens you will likely to prolong your stay in their apartment. Aside from the advantage, it would give them, it is best to purchase renter’s insurance for your own good. It wouldn’t cost that big to buy one. You would benefit more from it since it caters to protection for your welfare and valuable possessions. Why Do You Need It?The need to be protected is the number one reason why you must have renter’s insurance. Other reasons are as follows: Renter’s insurance provides protection at a very affordable price. It only costs an average of $16 per month or $187 per year and will depend on some factors. It could be the type of coverage, the deductible amount, your location, and how much is your needed coverage. Every state has a different average renter’s insurance cost. It protects your personal belongings from losses caused by your covered perils. It includes items like computers, furniture, clothes, and electric gadgets. Some of the perils that may be included in a renter’s insurance policy are:
ConclusionMost landlords require their tenants to purchase renter’s insurance. Presenting the proof of your policy means you are cooperative and can handle future negotiations with them. It is also one way of reducing their responsibility to you once a problem arises. Its liability coverage protects you from damages you might cause against other people and their property. It also covers injuries and medical bills to your guests that happened within your rented home. Legal expenses are shouldered by the insurer up to your limit. It covers additional expenses to maintain your normal standard of living. Some perils happened unexpectedly and it would affect your way of living. You may need to rent a hotel if your apartment got destroyed by fire or another disaster. Your renter’s insurance will pay for the additional costs including food. Your personal belongings are also covered while you travel. Even if you have your stuff with you or inside your car on a trip, and they got stolen, they are still covered. It doesn’t matter where you are in the world because your possessions are protected from loss by your insurance.
With all the advantages we discussed above, wouldn’t it be safe to acquire one now? Please do not wait until it is too late, get renter’s insurance today. Give us a call and we’ll help you get sorted out. |
Why is it important to have renters insurance?
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