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The Value of Renters Insurance


Money isn’t all about your balances and bottom lines. Consider the worth of your possessions, such as your textbooks, clothing/accessories, television, bike, smart phone – the value can really start to add up. Life happens, and situations can turn dire very quickly if you’re unprepared. Thankfully, that’s where renter’s insurance comes in. For most individuals who are renting, such items aren’t always easily replaced at a moment’s notice. Even if your landlord has property insurance, remember this coverage is for the land and building’s structure, not your personal contents inside. Purchasing coverage to replace your items will not only help you feel secure and prepared, but provide peace of mind as well.

What’s covered by renter’s insurance

The personal property portion of renters insurance is what protects your belongings and provides you with compensation for covered items should you need to file a claim. Policies vary, but this normally includes reimbursement should your items get stolen, damaged or destroyed, including weather-related events.

Liability protection may be offered as part of renters insurance and involves footing the bill for costs associated with others, such as medical expenses or property damage. For instance, if someone were to fall and injure themselves while on your property, this type of protection could cover associated costs.

Certain policies even offer coverage for additional living expenses, meaning if your home is temporarily unlivable, your policy may cover payment for alternate accommodations. For example, if there’s a fire in your complex and you find yourself needing a hotel stay while things get repaired, the additional living expenses portion would take care of those charges.

Keep in mind there are typically limits on liability and additional living expenses coverage.

Actual cash value vs. replacement costs coverage

Just like with most insurances, coverage should be unique to you and your needs. That’s why it’s important to consider a few things when deciding if you’d prefer your renters insurance to offer claim payout through actual cash value coverage or replacement cost coverage.

With the option of actual cash value, insurance companies pay you for the worth of items at the time of the claim and accounts for depreciation and normal wear-and-tear. Typically, these policies have a lower premium and are best for people who don’t have a lot of new items, or for those who don’t mind getting second-hand or used items as replacements.

When it comes to replacement cost, insurance companies pay for the current retail value of the items needing to be replaced, regardless of when they were purchased and length of ownership. This is usually the more expensive policy but good for those who have a lot of high-cost, easily depreciative items.

Tips when researching policy options

  • When deciding how much coverage you want, calculate the dollar amount of all the possessions you’d have to replace in a worst-case scenario. The individual costs of getting things like furniture, electronics, jewelry and clothing may not seem like much, but when totaled together, it can be an intimidating amount.
  • Don’t assume. You shouldn’t automatically think that every disaster causing damage equals a paycheck. Policies vary, and while one might cover hurricane damage or water damage from defective plumbing, not all will. Make sure you understand EXACTLY what you’re getting before finalizing any policy purchase.
  • Some financial organizations will even offer package insurance deals or discounts, such as taking a certain amount off your auto or life insurance policy by bundling it with renters insurance as well, so having it could actually MAKE you money!
  • Take photos and keep receipts of the items you would want to be covered. Maintaining personal records of your possessions will help with filing claims should you ever need to do so. Be sure to have multiple copies of these records and keep them in a safe spot, preferably outside of your residence or on a digital platform.
  • Get any questionable items appraised. You certainly wouldn’t want to guess and undervalue an item, so with any jewelry, antiques or other possessions you might be uncertain about, take it to someone who can perform a professional and proper assessment!

While this is a type of insurance you would never want to use, you’ll be happy you have it if you need it. In the long run, it’s a way to ensure your prized possessions are protected.

By CAMPUS USA at 4 Sep 2017, 11:18 AM

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