Renter's Insurance
It's often easier to make a case for personal property insurance or commercial property insurance than for rental property insurance. For the most part, renters feel like their landlord is taking care of them, and they don't have to worry about anything. But in the event of a disaster, your landlord isn't looking out for you and your property. That responsibility is yours, and it's too important to let it slide. If you want to protect yourself, you absolutely need renters' insurance.
Most of you probably haven't even thought about getting some type of insurance to cover your personal property such as your clothes, furniture, tv, etc. You can protect your belongings by purchasing renters insurance, which is similar to homeowners insurance for those who rent. Renters insurance will protect your property from theft, fire, and other perils. One common myth is that your landlord's insurance protects you. This is false. Your landlord's insurance only covers the dwelling and does not cover your personal property. Another myth is that you don't own that much stuff and that it isn't worth buying insurance. This is also false. Your possessions are worth more than you expect. Think about the hundreds of CDs you own. At $10 per CD, you probably own a couple of thousand dollars worth of CDs. And your bed, dresser, and couch add up to several thousand dollars, as well as your stereo equipment, tv, skis, bike, jewelry, and clothing. Once you make a list of all your belongings and estimate their value, you realize that you own thousands of dollars worth of property. The average person has over $20,000 worth of stuff. Surprised? In order to protect your belongings, you should buy renters insurance. Most renters' insurance policies will cover all of your personal property. And protection is worldwide. If your clothes are stolen while you are on a vacation in the Bahamas, you are covered. Nice, isn't it? As you can see, renters insurance is one type of insurance you should not be without.
What renters insurance protects
You may think your things aren't worth much. But the average person has over $20,000 worth of stuff. And that's stuff that's probably not covered by a landlord's insurance policy. Most renters' insurance policies are similar to policies you would have if you owned your home. Your renter's policy will cover your furniture, clothing, TV, stereo, appliances and other personal property subject to the policy deductible. For example, renters' insurance will pay to repair or replace personal property that is damaged, destroyed or stolen.
Limits on personal property can vary by company, but most offer at least $4,000 worth of protection. Renters policies generally limit payment for certain losses as follows: $100 for lost cash; $2,500 for personal property used for business; $500 for valuable papers; and $500 for theft of jewelry, watches and furs. Also it will give you liability protection if you are legally responsible for another person's injury or property damage. If someone is injured in your home and files a lawsuit, your landlord's liability policy may not cover the damages. A renter's policy automatically provides $25,000 in liability coverage. You may want to consider extra coverage available for an additional premium.
A renter's policy normally will pay for the actual cash value of your losses. In other words, depreciation and wear and tear will be subtracted from the value of your property. However, you can add replacement cost coverage for about 15% in additional premium. It pays the full cost of replacing your damaged property, minus your deductible. Many policies carry a deductible equal to one percent of the amount of the policy. (Example: A renter with a $25,000 policy would pay the first $250 before the insurance company pays.)
Getting renters insurance Dependents, such as college students, may have limited coverage through their parent's or guardians' homeowners policies while temporarily living away from home with a special rider to the policy. However, you will need to consult with their agent to determine what coverage, if any, is available through their existing homeowner's policy.
Because insurance companies' rates vary widely, it pays to shop around and get premium quotes from several companies for the amount of coverage you want. It also is important to look into an insurance company's financial stability and service record.