Renter's Insurance To Fit Your NeedsRenters Insurance is highly affordable and one of the most useful and underappreciated forms of insurance protection available. Many tenants mistakenly assume that their landlord provides insurance which covers the tenants personal property, when in fact, landlords only hold insurance against losses related to damage to the home or property and not the renters contents.
The standard home insurance policy for renters, known as an HO-4, covers losses to your household inventory from numerous perils, including theft, fire, storm damage, vandalism, falling objects, water damage from plumbing, and electrical surge damage. Protection against natural disasters requires adding a separate rider, something you should seriously consider if you live in an area prone to flooding or earthquakes.
Renter's insurance offers the added benefit of liability protection. If someone suffers an injury in your home and decides to sue you, you would be covered for any awarded damages and legal expenses up to your policy's limit. Also, there is loss of use protection, which provides temporary housing expenses of up to twelve months while the home is being repaired.
You will want to determine whether your policy provides actual cash value for loss of possessions, or full replacement cost coverage. Most of your belongings are used and depreciated in value, but would be expensive to replace. Actual cash value coverage reimburses you for the depreciated value of your assets. Replacement cost coverage is more expensive but provides, as the name suggests, the cost of replacing your lost property. Replacement cost coverage typically requires that you submit receipts for purchases of replacement items in order to be reimbursed.
Valuable items and those that are difficult to replace or appraise warrant separate riders. Keep good records of your inventory of valuable assets, including digital photographic records of the items.
What will all this cost? A typical renters insurance policy will run about $15 to $25 a month and will provide $20,000 to $40,000 in protection against loss of property and $100,000 or more in liability coverage. Additional cost may apply to cover highly valuable possessions. Rates may vary according to your location and your credit rating. Increasing your deductible will help in reducing premiums. Some insurance companies will discount renter's premiums when combined with other insurance, such as an auto policy held with the same company. Insurance professionals can assist you in selecting the optimum policy for your needs. The peace of mind that comes with this protection can often far exceed in value the cost of premiums.
Janet S. Regan, MPM, RMP
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