If you live in a rented house or apartment, your landlord’s insurance covers you only for necessary repairs that would have to be made in the event that a fire or other disaster damages or destroys the property. To cover your belongings, you will need insurance known as renters insurance, to have the financial coverage you need for yourself and your belongings.
Renters insurance provides three important forms of protection:
- Cover your personal belongings
- Provides liability protection
- Allows you to obtain reimbursement for additional maintenance and survival expenses incurred after a disaster
The following checklist of things to follow when considering renters insurance will help you make sure you get the right coverage when you purchase renters insurance and when you talk to your agent, insurer representative, or anindependent broker.
How much insurance should be purchased?
Make sure you get enough insurance to replace all personal belongings in the event of a fire, theft, or any other peril listed on your policy. The quickest and easiest way to determine the value of your personal belongings – furniture, clothing, appliances, electronics, kitchen, and household utensils – is to create a home inventory. A home inventory is a detailed listing of all your personal belongings with the estimated value of each item. Also, having an up-to-date inventory of your belongings can help you file an insurance claim if necessary, making the process quicker and easier.
What type of coverage should be obtained between the replacement coverage (Replacement cost) or the real cost coverage (Cash value)?
A policy that provides actual cost coverage pays the value of the affected belongings less their depreciation, while the replacement coverage policy replaces your belongings without deducting their depreciation. The price of a policy that pays replacement cost is about 10% more expensive, but it can be very advantageous since most all personal items tend to depreciate very quickly.
Which disasters are covered and which are not?
Renters insurance will cover you for losses sustained in the event of fire, fire, smoke, lightning, vandalism, windstorms, snowstorms, explosion, and some specific type of water damage, such as that the neighbor from the floor above leave the tap open and the water enters your apartment; or a pipe burst in your apartment and damage your belongings. However, the vast majority of renters’ insurance policies do not cover damage caused by a flood. Flood damage is specifically covered by flood insurance and can be obtained from the federal government through the National Flood Insurance Program or National Flood Insurance Program or through some specialized private insurers. Your insurance agent or the insurer with whom you obtain renters insurance can broker the NFIP program to provide you with renters flood insurance. Another hazard not covered by renters insurance is earthquakes. This insurance is obtained separately from either a private insurer or a state-assisted program, usually in the form of an endorsement or policy attached to your renter’s policy, or separately, depending on where you live.
What is the deductible and how does it work?
A deductible is the amount of money that the insured, the tenant in this case, or you, will pay for repairs or compensation before the insurance takes effect and goes on to pay the damages. A deductible is usually expressed in an amount determined by the policy that typically ranges from $500, $1,000, or $2,000, although there may be higher deductibles as well. The higher the deductible, the cheaper the policy premium will be; so if the insured can afford to have a $1,000 deductible, they may get up to a 25% discount on the premium than if they had a much lower deductible. However, it should be noted that this is the amount you will have to pay out of pocket before the insurer begins to pay for damages when an insurance claim is filed.
What is a “floater” or additional policy and who needs it?
If the tenant owns expensive things, for example, jewelry, electronic equipment, musical instruments, collectibles, antiques, furs, or other valuables, additional coverage in the form of a “ floater ” should be considered.”. Most renters policies have a limited amount of coverage for valuable items; What a related or attached policy does is increase coverage (amount and type of coverage) and extend the amount or amount insured to make it more consistent with the value of the items being protected or insured, including if they are accidentally lost. For this, you need to present receipts or purchase invoices or an appraisal ( appraisals) of the object to be insured with the “annex”. It is very important that the objects are properly valued since the amount to replace them will be based on that valuation, and the amount to be paid for the insurance premium as well. The insurer or insurance agent can help locate an expert who can properly value your belongings or valuables. For other items, such as a laptop, a separate insurance policy may also be required. Check with the insurer that offers renters insurance to see if your laptop is included in your insurance and if it has a separate or different deductible.
Does the tenant have enough liability coverage in case they are sued by someone?
Renters insurance provides third-party liability protection that includes coverage against legal claims arising from damage to your home or damage by related parties or your property, including pets. This coverage pays both for defense costs in court and for the awards that a judge or court assigns to pay as a result of said lawsuit, all up to the maximum coverage purchased under the policy or up to the limits of the policy. Most insurance policies offer at least $100,000 of liability coverage, but there are higher limits as well. Consider what your needs are and get enough coverage to protect all your assets and belongings.
In addition, it is also very possible that under your renter’s policy you have a portion known as No-Fault Medical Expense Insurance, as part of your liability coverage. This coverage serves only to pay for medical costs to third parties, is not usable for you or your family, and is not a substitute for your health insurance or medical insurance. Medical payments coverage allows if someone is injured in your home, the insured makes a claim for the costs of medical services to treat such injuries to renters insurance; medical expenses are reimbursed without the need to file a legal claim to be paid. Most policies include coverage of between $1,000 and $5,000 for medical payments.
Is it necessary to have an umbrella civil liability insurance policy?
People who feel they need more liability insurance coverage may choose to purchase an umbrella insurance policy of this style. The umbrella policy, as its name indicates, comes into effect to provide coverage over and above the coverage of existing civil liability policies, that is, when the limits are included in the renter’s insurance policy for the portion of civil liability. These policies also provide coverage against slander, libel, and defamation. For an additional $150 to $300 a year, a policy of up to $1 million of umbrella liability coverage can be purchased. The next million of protection may cost you even less, $50-$75 more. Because the umbrella policy takes effect after the coverages over which it adds protection have been exhausted, there are certain minimum limits that must be exhausted before it takes effect. Most insurers require an insured to obtain at least $250,000 in liability on the auto policy and a minimum limit of $300,000 on the existing homeowners or renters insurance policy before they can obtain or purchase an umbrella policy. additional one million dollars of liability coverage.
If the property is destroyed by a disaster that is covered by the policy and it is essential for the tenant to move to another place, renters insurance provides a portion of the money that will allow paying additional housing expenses incurred by said event (in English it is known as additional living expenses – ALE) or loss of use of the facilities. The insurance portion of ALE pays for hotel receipts, temporary rentals, restaurant meals, etc. when rented facilities cannot be used while they are being rebuilt or made ready for use. It is essential that renters know how much coverage they have for these expenses and what their limits are. Some companies offer coverage defined in a number of days or a portion of time while other companies have a certain number or maximum amount to be paid.
When operating a business from the rented home, is it necessary to obtain additional coverage for the business?
A renters insurance policy typically only provides $2,500 of business equipment coverage, which is usually not enough to replace all of a business’s equipment, even if it’s very small or operates out of your home. In addition, the business may also need to replace the income it would lose while the rented space is being fixed up. Business insurance varies greatly depending on the things that are handled in the business. Some companies may need very specific things depending on the type of work and the insurance for these lines. Insurance companies have various mechanisms to help meet those needs and there are some that could offer such insurance while others do not, all depending on the specific type of business.
Do I have any coverage for my belongings when I am away from home or traveling?
Most renter’s insurance policies include coverage for belongings when they are away from the regular residence. This means that your belongings inside and outside your regular residence are covered against basically the same disasters as if they were in your home. For example, property that is stolen from your car will be covered by your renter’s insurance up to 10% of the total personal belongings coverage you purchase. If you think you’ll need additional coverage for excess personal belongings, for example, for frequent travelers, shop around among potential insurers that offer those riders or floaters you may need.
- Discounts available
Insurers often offer discounts to renters if they have another insurance policy with the company, such as auto or business insurance. You can also find discounts if…
- Do you have a security system in your home?
- Use smoke detectors
- The doors are equipped with good locks
- Has several policies with the company
- Policyholders have a good credit history
- You have a track record and seniority or loyalty with the insurer
- The insured or tenant is over 55 years of age
Often, insurers offer discounts to the many interested in insuring their belongings and these can vary from one company to another, from one state to another, and therefore it is essential to review the insurance laws with time and calm to know how they are affected; In the same way, employers and employers could manage group insurance with which to offer better rates than the traditional ones that can be found anywhere.
