Many renters don't stop to think about what happens if there is a
fire, someone breaks in and steals their new TV or stereo, or a
visitor slips and falls on their property. The sad truth is; you
will be responsible! While your landlord has insurance that
covers the actual building, that coverage does not include your
personal property or liability for injuries which occur in the
space you rent ~ be it an apartment or a house and yard.
If a fire should destroy or damage your home, your landlord's
insurance will cover the structure. It won't cover damage or loss
of your belongings. Neither will it provide for the cost of
temporary housing for you and your family.
You may think you don't own enough personal property to make the
cost of insurance worthwhile. You're probably wrong! If you sit
down and add up the cost of everything you own, you may be in for
a big surprise. Consider what you have invested in such things
as:
* Furniture and accessories
* Electronics like TV, stereo, computers
* Small appliances like microwaves, toaster ovens, etc.
* Clothing
* Art work like paintings or prints
* Dishes, silverware and cookware
* Sporting equipment
* Books
* Jewelry
Could you afford to replace all of these things?
Even worse, what would you do if a friend is injured on your
property and decides to sue you for medical costs and more?
It's a scary thought, isn't it?
Are you beginning to see why rental insurance may be a very wise
investment?
The cost of rental insurance is based on several factors:
* The dollar amount of your coverage
* Deductibles
* Whether you choose to be reimbursed for Actual Cash Value or
Replacement Costs (more about that in a minute)
* Where your rental property is located and the number of
previous claims made, not only by you, but by others living
in the same area.
Let me explain the difference between Actual Cash Value (ACV) and
Replacement Costs. ACV is the value of your property at the time
a loss takes place. For example, if your television set is five
years old, it's valued at much less than if it were brand new.
The lesser amount is what you are reimbursed.
However, if you opt for Replacement Cost, you're paid whatever it
costs to go out and buy a new TV with similar features. Insuring
for replacement cost raises the amount of your premium so it's a
good idea to get quotes for both ACV and Replacement Cost
policies. Then you can decide which option fits your needs and
budget.
Another thing to keep in mind is that jewelry, valuable
collections, and guns are usually covered under a separate policy
or "rider". If you own these kinds of items, be sure to tell your
insurance agent. You don't want to find out after disaster
strikes that they aren't covered or that they aren't covered for
their true value.
One way you can reduce the cost of your rental insurance is to
check with whichever company insures your car. If they provide
rental insurance you may be eligible for a multi-line discount.
Rental insurance may be worth the investment just for the peace
of mind it offers you.
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