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Determining Factors of Your Renters Insurance Premium

By Compuquotes Team on March 27th, 2008

Renters Insurance

If you know anything about homeowners insurance then you basically know everything there is to know about renters insurance. If you are like the rest of us and get more confused the more policies you read, then don't feel bad. The renters insurance industry is very competitive which leaves hundreds of companies offering thousands of different policies, which is enough to confuse anyone.

A standard renters insurance policy is designed to cover the contents of a rented property against damages caused by theft, fire, or any covered natural disaster. A renters insurance policy also includes liability protection which will cover any injuries that other people suffer while on the rented premises. Liability coverage is extremely important because it protects the policy holder from unexpected financial issues.

Your renters insurance policy will cover only what it states to cover. There are generally a standard set of perils that are covered with a renters insurance policy including fire, lightning, windstorm, smoke, theft, accidental water damage due to a pipe, as well as vandalism. Your renters insurance policy can also cover the reimbursement of medical expenses of those who do not live with you.

You can purchase flood and earthquake insurance separately from a standard renters insurance policy in areas that are prone to such natural disasters. This is commonly the same for windstorm coverage which can be purchased in a separate policy if you feel that you need it.

There are two different types of valuation that renters insurance use for your personal possessions including the actual cash value and the replacement cost. The actual cash value reimburses you for the depreciated value of the item at the actual time of loss. A five year old big screen TV will be dramatically lower in price than when it was purchased.

You can go with a replacement cost policy that will reimburse you for the replacement cost of the item, so instead of getting the five year old depreciated value of your TV, you will get a brand new one! Of course this policy is more expensive but it is so worth it when you suffer a loss.

When you purchase new items, especially those that are high priced items such as jewelry and electronics you should immediately declare them on your policy or on a separate rider policy if necessary. Keep in mind that if any of your expensive items aren't declared at the time of a loss, you will not be able to recover a dime in regards to those items.

To remain on the safe side you should keep an updated detailed inventory that should include the value and serial number of every item. It is best to keep this inventory in a fire proof safe or somewhere outside the residence such as a safe deposit box.

Purchasing a renters insurance policy is one of the best investments you can make. Don't wait until something bad happens to you before you decide to get protection.

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