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Should renters purchase insurance? A common misconception is that renters are not responsible for damage due to fire, theft, smoke, etc., when in fact that may or may not be the case. Consider the following example:
Travis had rented his apartment for more than a decade when the unit above him caught fire, resulting in smoke and water damage to his belongings. Thankfully, Travis had a renter’s insurance policy that covered the cost of replacing all damaged items in his five-room apartment. Although he forked out some money to cover the deductible, it was nothing compared to what he would have paid if he had not been protected by a renter’s insurance policy. His replacement policy offered greater benefits than an Actual Cash Value (ACV) plan that would have taken the original cost of the items as well as any depreciation into consideration. In this instance, his decision to purchase renter’s insurance paid off in the long run.
There is no truth to the idea that a tenant cannot be held liable for damage due to a rental unit or its contents. To view available policies in your area, enter your zip code in the space provided and begin comparing quotes right away.
How to Protect Yourself with Renters Insurance
The situation listed above is unfortunately all too common as many renters do not feel they have a need for insurance. In the above scenario, the biggest thing Travis had going for him was the fact that he had purchased a well-researched renter’s policy well in advance. The second advantage he had was the fact that his policy covered the replacement cost of his household goods rather than the actual cash value. Although such a policy does cost more initially, it ensures there is enough money to replace all items that are lost. Many times, that is not the case with a policy that takes the depreciation of goods into consideration.
Another smart move Travis made was to select the highest deductible amount he could reasonably afford. A higher deductible naturally means lower annual premiums. Less money on insurance means there is more money that can be saved toward paying a deductible when or if the time comes.
Researching the various renter’s policies and comparing prices is easy when people use an online comparison tool such as ours. Travis was able to protect his personal property while reducing his liability because he had a policy that perfectly suited his needs. That type of peace of mind is something all renters can achieve by ensuring they have adequate coverage.
Free renter’s quotes are available online here.
Find Out What is Covered with a Renters Insurance Policy
Renter’s insurance is a subset of homeowner’s insurance, and is often referred to as type HO-4. Designed to help renters protect their personal property and avoid liability, it differs from an insurance policy that covers a dwelling and the land it sits on. That type of policy is taken out by the landlord, and covers damage to an actual structure. A basic renter’s policy on the other hand may cover damages from fire, wind, hail, lightning, public riots, and explosions. More extensive policies may also cover damages due to aircraft or vehicle crashes; vandalism, malicious mischief, or other criminal activity; excessive ice, snow, or sleet; a volcanic eruption, falling objects, theft, smoke, malfunctioning home appliances, or sudden electrical surges.
The majority of renter’s policies do not include coverage for earthquakes or floods. As such, individuals who live in areas where these conditions are possible may want to consider taking out an additional rider or purchasing a separate policy.
In all cases, renters should be very sure what their policy covers before signing any agreements. Never assume any type of coverage until after the fine print has been read.
How Much Renter’s Insurance is Needed?
The amount of renter’s insurance that is needed is directly tied to the value of the goods being insured. It can be quite an exhausting task to determine how much one’s possessions are worth, yet is something that is necessary. Buying more insurance than required is a waste of money, but purchasing less than needed could prove disastrous should the time ever come to file a claim.
The best way to determine the value of property is to make an itemized list that includes its purchase price or current value (as closely as possible.) Adding all the items up will provide consumers with a clear picture as to how much money they could expect to spend if they were required to replace all those items. Taking photographs or videos of high-dollar items is also recommended, and will help speed up the claims process if there ever is a loss.
Buyers should note that many policies have a preset dollar limit for many items. Some examples include jewelry, guns, coins, bank notes, and securities. This is another area where an itemized inventory can come in handy, because it can help people choose a policy with a higher dollar amount if necessary. Be advised that extremely valuable items could need their own rider, particularly rare or heirloom jewelry or antiques. Maintaining documentation such as receipts and photographs is highly recommended, as is keeping all paperwork inside a fireproof lock box or safe.
Protect Renters from Liability with the Right Insurance Policy
Many renter’s insurance policies contain addendums for liability coverage. Liability coverage is a type of protection that covers tenants if another person is injured on the property. It may be used toward legal fees or payments for damages to the other party. Most renter’s policies have a liability limit of up to $100,000, although financial experts often recommend purchasing as much as $300,000 to ensure maximum protection against civil lawsuits. Individuals should not just assume that they will not be held liable for injuries, but instead should protect themselves by having at least a minimum amount of liability coverage.
Balancing Costs and Coverage Among the Various Rental Policies
The best way to keep the cost of a rental policy down is to choose one with the highest deductible that is reasonable under the circumstances. In addition, implementing certain safety mechanisms can also reduce costs. For example, installing a fire or security alarm may greatly drive down premiums. Having the right fire extinguishers on hand or a working sprinkler system in place reduces liability, and so will installing dead bolts on all exterior doors and high security locks on all windows.
Dog owners face additional liability, and may therefore pay bigger premiums. This is especially true for those owning a very large dog or a breed that is prone to attack. Some breeds of dog that may result in increased liability include Doberman pinschers, German shepherds, pit bulls, Rottweiler, chow, Siberian huskies, or any type of wolf hybrid. These canines are more likely to produce a serious injury if they do bite someone, but are not necessarily more prone to biting than other breeds.
Owners of any high-risk dog breeds should shop around for a policy that suits them. Failing to disclose the presence of an animal is not recommended as an individual could still be held liable regardless. An insurance company could also cancel a policy due to a failure to disclose.
How to Compare Renters Insurance Quotes and Obtain the Best Rates
Having a good understanding of renter’s insurance will come in handy whenever it is time to compare quotes. The comprehensive tool we provide will allow people from all walks of life to evaluate the features of different policies and choose the one that is right for them.
Getting started is simple-just type in some general information about the type of policy that’s needed and a list of qualifying providers will then populate. It is then easy to compare prices and benefits in order to select the right policy and amount of coverage. Having the right renter’s policy is the first step toward ensuring peace of mind in the event something unfortunate happens.
It’s easy to begin comparing free online quotes right now in the comfort of your own home. Go ahead and get started while the idea is still fresh in your mind. What are you waiting for?
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