Introduction to Renters’ Insurance
Having your own home for the very first time is a big life event. The renting of a home can mean the spreading of one’s young wings or simply that you have changed your location with a move into a new city or perhaps have proverbially moved on up. Excluding the hassles of packing and organizing for the move itself, this is all generally a good thing for most people. However, it is important to keep in mind how you might end up financially should an accident or some other loss-causing event occurs in your new place. By purchasing good renters insurance, you can keep you home safeguarded while also save money over the long term should the unexpected ever happen.
Who needs it?
Renters insurance is differentiated from homeowners’ or auto insurance in that this kind of policy only covers personal belongings within the walls of your rented dwelling. The landlord usually will have a policy that covers the actual home or apartment structure, but if an accident, fire, or individual destroys any of your personal items, then only renters’ insurance will reimburse you for lost or damaged belongings.
You may be under the false impression that your possessions are not all that valuable, but if you ponder the total dollar amount it would take to replace all of it right now, you might be aghast. Most renters certainly couldn't come up such an amount without breaking the bank or going into debt. Also, and quite vitally, a renter’s insurance policy can provide protection to you if someone were to injure themselves while inside your apartment and then sue you. Keep in mind that this coverage is so important there's a good chance that the landlord will mandate that you buy it.
What it protects
Normally a renter’s policy will cover losses that are the consequence of such destructive events as fires, theft, vandalism, a plumbing leak, and severe weather. However, this policy like others will likely exclude such natural disasters as floods, hurricanes, or earthquakes. These events will need to be covered by separate policies and, depending on where you live, could be important to look into so as to know how these additional coverage options could help.
How it functions
Renter’s coverage is for those who live in a dwelling that they do not own. If you own property that you rent to others, the coverage you need is in the form of a landlord policy rather than a renter’s policy. If you ever need to file a claim, you must have kept up on your premiums. Then you likely will need to pay a deductible to activate the coverage. The deductible on your policy is the amount you must first pay before your insurance plan kicks in. Generally, the larger the deductible, the lower your premium payments will be.
Types of coverage
Renters coverage is pretty standard, though there are variations depending on the type of home in which you live. The main variance in policies is the payout choices: One type is “actual cash” that gives you the value for your things minus any depreciation. “Replacement value” policies will normally be more costly, but you get more reimbursement for your losses.
The major boon of a good renter’s policy is the knowing that your belongings are financially protected in the event of some loss. An additional plus is that renter’s coverage is relatively cheap and but very effective in time of need, especially in regards to your liability.