Insurance

What is renters insurance

Renters insurance is a fine option when you rent a common accommodation and are afraid of causing any harm to the property of your neighbors or having your possessions damaged. In case something unexpected and extraordinary happens you can end up with a heavy burden of damages to pay for. To avoid this unpleasant situation consider purchasing a renters insurance that may save you a pretty good amount of money.

Sometimes people miss homeowners insurance and renters insurance. Actually, there is no much difference between them. But note that homeowners insurance includes the coverage for the building while renters insurance doesn’t.

Renters insurance offers three protection options: personal possessions, liability and additional living expenses.

Personal possessions. A typical renters insurance covers the damages caused by such disasters as theft, fire, explosion, windstorm and a set of others. The detailed list you may find in a particular policy. Note that you will fail in covering earthquakes as well as floods. To protect yourself from these events you have to buy a supplemental insurance. Be very careful in specifying the insurance limit. To make a right decision try to evaluate all your belongings, starting from expensive electronics and ending with kitchen towels. Remember you may lose them all in a single moment so the insurance should fully reimburse the losses. Specially designed inventory lists may be very helpful. You may find free samples in the Internet.

Liability. Liability protection means you’ll be covered if third parties suffer any losses as a consequence of your or your family members actions. For instance, if your son played with a ball and a dog and broke a neighbor’s window the liability insurance will cover the costs of repair. The lower amount of liability coverage commonly is $100,000. Some insurers say the minimal rate should be $300,000. Greater limits are also available and are usually referred to Umbrella Liability coverage. Each additional million dollars of liability protection will cost you from $200
to $350 per year.

Additional Living Expenses. ALE is a component of a renters insurance policy. Having lost your accommodation as a consequence of some disaster you certainly have to find another temporary place to live in. Take advantage of the policy, it covers your additional living expenses. Such expenses as restaurant meals, hotel bills, temporary accommodation rent are usually reimbursed.

The insurance market offers two kinds of renters insurance polices. They are as follows:

1. Actual Cash Value. This policy covers the value of your belongings reduced by the depreciation norm. The coverage may reach the very policy limit.

2. Replacement Cost. Unlike the previous case the depreciation rate isn’t taken into consideration so the real cost of your belongings is fully covered. Certainly, the price of such policy may be up to 10% higher but in some occasions it’s really worth paying more.

In accordance with some surveys conducted in the USA during recent years a small number of tenants have renters insurance in spite of obvious benefits it provides. There is no problem in purchasing renters insurance at all. Almost every insurance company offers it. As a rule, insurers selling homeowners insurance additionally have renters insurance programs.

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