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Why You Need Renters Insurance

By Compuquotes Team on March 27th, 2008

Renters Insurance

If you are one of the many renters who are currently renting a home or apartment rather than buying a home then you may think that your personal belongings are covered under your landlord's insurance policy. However you are not, your landlords property insurance covers any damage caused to the structure itself, not your personal possessions or liability. To protect yourself you will need renters insurance.

Typical renters insurance policies will cover damage caused by fire, smoke, windstorm, hail, lightening, sleet, snow, ice, volcanic eruptions, explosions, aircraft and ground vehicles, falling objects, riots and other civil disturbances, water damages caused by home utilities, vandalism and other malicious destruction, and damage caused by electrical surges.

This means if the property where you reside becomes uninhabitable due to these types of damage then your renters insurance will cover the displacement costs. You renters insurance will pay the rent where you are staying while your residence is being repaired, or until you permanently relocate. Most renters' insurance policies will pay up to 30-40% of the total value of your policy.

There is also usually a time limit that is applied to this type of coverage and when you reach the limit your insurance company won't cover your expenses any more. The exact amount of this time limit will be dependent on the specific policy but isn't usually longer than a year. Be careful with companies who use the term, 'a reasonable length of time' when it comes to how long they are going to cover you after an incident at your residence.

Renters insurance comes with a hidden benefit most people don't even know about, liability coverage. This means that if someone were to get injured on your property you are covered for the medical costs up to your liability limit which is dependent on your own policy terms. When selecting a renters insurance policy get enough liability coverage that will protect you against having to pay out of pocket for someone's medical expenses, legal costs if the injured person were to sue you, as well as any damages that were awarded for pain and suffering or loss of work compensation.

Standard renters insurance policies do not cover floor and earthquake damage because it tends to be restricted to certain areas of the country. If you find that you live in an area that is prone to natural disasters then you should consider getting a separate policy to obtain the coverage you desire.

When you are searching for a renters insurance policy you should consider whether the policy will cover the actual cash value or the replacement cost. The actual cash value means that you will be covered for the value of the possessions at the time of damage or theft, with years depreciating the value. You may want to get replacement cost coverage on certain items that depreciate in value quickly such as electronic equipment and computer systems.

Ultimately where you live, your deductible amount, and the company and policy coverage you go with will all determine the price of your renters insurance policy.

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