Friday, October 17, 2014

The Importance of Renters Insurance

If you live in a rented house or apartment, homeowners insurance is not something you need to worry about. But that doesn't mean that you don’t have belongings and assets that you need to protect. Your landlord will have insured the building in which you live, but that does not cover your personal possessions. What if they should be stolen or damaged or destroyed by fire or natural disasters? Most people tend to underestimate the value of their belongings. It’s easy to think that replacing your possessions will cost you a few thousand dollars. When disaster strikes, you may suddenly find that the actual cost runs into tens of thousands of dollars.

Do Not Underestimate the Value of Your Possessions

Whether or not you decide you need renters insurance, it’s a good idea to inventory and value all your belongings. Take a couple of weekends and catalog everything you own. You may think you can do it in a couple of hours, but once you start investigating closets, cabinets, attics, basements and garages you will normally find that you own much more than you ever realized. Sure, a lot of it may be junk. If so, you are now in a position to get rid of it. What remains is what is important and now you can start to put a replacement cost on all that you own. The final figure may come as a huge surprise. Most people do not realize how much they accumulate over the years and how valuable it all is. If you lost it all, could you replace everything? And if you can do it, take a moment to consider the extent of damage that it could cause to your savings and financial stability. One leading insurance company estimates that the average person has over $35,000 worth of possessions that are normally not covered by any policies that a landlord may have.

It’s Not Expensive

A typical renter’s insurance policy should not cost you more than a dollar a day. That’s is an insignificant amount when compared to the peace of mind that comes from knowing that your belongings are protected in case of loss. If you don’t have renters insurance, why not call your insurance agent and talk to him or her about taking out a policy? The advantage of buying the insurance from a company you are already dealing with is that most insurers offer discounts to people who already have other policies with them.
What’s covered and what’s not
Renters insurance covers, but is not limited to:
  • Theft
  • Fire
  • Lightening
  • Hail
  • Windstorms (hurricanes etc.)
  • Damage to the plumbing system due to freezing
The coverage for some types of property / belongings may be subject to dollar limits:
  • Gold and Silverware – limitation normally applies to theft only
  • Jewelry and furs
  • Money, bank notes and coins
  • Securities and negotiable instruments
  • Watercraft, furnishing and equipment
  • Trailers
  • Firearms – limitation normally applies to theft only
Renters insurance will not cover:
  • Issues related to business pursuits
  • The provision or non-provision of business services
  • Bodily injury or damage to property that is intended or expected by the insured
  • Ownership, use of and maintenance of motor vehicles, aircraft and some types of water craft

Renters Insurance is almost similar to auto insurance and therefore the coverage depends largely on the type of plan that you choose. You can either insure all your belongings or you could be selective in what you wish to insure. You can even decide how much deductible you want on your liability coverage. Renters Insurance also covers any damage that you may have accidentally caused. Before making your decision it would be advisable to shop around for the best coverage you can get.

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