Renters Insurance Explained: Understanding Your Coverages
Renters insurance covers theft, lawsuits, items stolen out of your car, luggage lost at the airport, bus station or train station. You’re also covered if your clothes disappear from the cleaners, if you are sued for slander, if you hit a pedestrian while riding your bicycle or if your television gets destroyed due to wiring in your apartment or condo unit or rented home. These are just some of the things renters insurance will cover that a landlord’s insurance policy simply would not.
Imagine that your home is broken into and all your jewelry, artwork, your computer and television were gone. In the process of robbing you, your entire place may have also been turned upside down, leaving some items broken. With renters insurance you’re covered for all of this, up to limits.
If any of your belongings are especially valuable and would surpass limits, you’ll want to buy a rider or floater to make sure that you’ll be reimbursed for the full amount. Take into consideration that there are two different types of renters policies, so choose the one that makes more sense for you, not just which is cheaper. The more expensive type (replacement value) will come closer to what you paid for the item than a cash value policy, which would reimburse you but with depreciation figured into the value.
Most people are not aware that a renters insurance policy protects them against lawsuits. Say you had visitors at your home and someone fell and got hurt or chipped a tooth. Your renters insurance would not only pay for the damages or injuries but it would protect you from incurring legal expenses if that person decided to sue you. The same is true if you have a dog and it bites someone.
Slander is a charge most of us are never met with but now that people are airing some very personal information on social media, you can’t be sure that you won’t be held liable for personal injury. With renter’s insurance, you are covered for legal fees if you slander someone and they file charges against you.
Another instance you’re protected by renters insurance is if you had items stolen out of your car. Your iPad, iPod, tablet or laptop was not in your car and auto insurance wouldn’t cover the stolen item because it’s only covered by renters insurance and home insurance. The same goes for missing clothes at the dry cleaners. Because your clothing is in your inventory of belongings, it is covered. Proving the price beyond the standard reimbursement cost is another story, unless you have receipts for the missing items.
Third party personal property is also covered under your renter’s insurance. For instance, if your friend’s tablet was in your house when you were robbed, you’d add this to the inventory when you file a claim.
If you’re riding along carelessly on your bike and hit someone and they get hurt, your renters insurance would cover the medical bills if that pedestrian is hurt. If they sue, you will be covered for legal fees.
Keep in mind that filing too many claims will result in higher premiums. Your insurer may also drop you and it’ll be hard to find another insurer who will. Insurance is really meant to cover overwhelming costs, not small ticketed items, so pick and choose your battles wisely. Plus, it makes little sense to file claims for small items because you’ll likely be paying that amount, if not more, in the deductible that you must pay in order to get reimbursed.
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Actual Cash Value (ACV) is also known as market value; a Replacement Cost Value (RCV) is when you're reimbursed for the same or similar item.
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