|
| |
What is
Renters Insurance and
What Does Renters Insurance Cover? PART 1
You
are renting a place to stay, it is important to know what is renters
insurance so that you can protect yourself from the financial risks
that a tenant faces. Find out what does renters insurance cover and
whether you should be buying it today.
What is Renters
Insurance for Tenants?
When we talk about insurance, the first thing that will come to most
people's mind is either health insurance, car insurance or home
insurance. If you are a tenant, the first thing that should come to
your mind should be renter insurance.
So what is renters insurance? As the name suggests, renters insurance
will cover any unexpected financial losses that you face as a tenant.
This will include any damage or theft of your personal belongings plus
any legal costs and damages in case someone injures himself inside your
rented place.
Digging deeper into the question of what is renters insurance, you
should know that renter insurance comes in two common flavours: Actual
Cash Value Insurance and Replacement Cost Insurance
If Actual Cash
Value ACV Insurance will pay for you the current (depreciated)
value of your destroyed / stolen items. For example if you bought a
laptop two years ago for $1,500 and it was recently stolen. If the
laptop is worth only $500 today, the insurance company will
pay you the current value of $500.
Replacement Cost Insurance will pay to you replace the items that were
destroyed or stolen. Backing back to our example above, if your laptop
was stolen and you are covered by replacement cost insurance, you are
likely to receive at least $1,000 so that you have enough money to buy
a brand new laptop.
Naturally replacement cost insurance will be more expensive since you
are given a bigger payout. For more details, see Part 2 of this Guide
under How Much is Renters Insurance.
What Does Renters
Insurance Cover?
Now that you know the important basics on what is renters insurance,
it's time to learn what does renters insurance cover.
Firstly renter insurance will cover you for the theft or destruction of
your possessions. This destruction can be caused by natural disasters
(lightnning, windstorm, volcanic eruptions heavy snowfall) or by
manmade accidents (vandalism, water damage, electrical damage, vehicle
collision, rioting).
If there is major damage to rental property that makes it unhabitable,
renter insurance will also pay for your temporary living expenses
elsewhere while repairs are being made.
By "possessions", we are talking about your furniture, electronics,
jewellery and sports / musical equipment. You may also be covered for a
small sum of cash (up to $250 to $500). If you have expensive belonging
such as a laptop or jewellery, you may have to pay extra to cover the
full worth of these items.
Do you know that if someone injures himself on rented property (such as
a guest falling down and breaking an arm), it's possible that he can
sue you? So what does renters insurance cover against legal
liabilities?
In the case where you find yourself entangled in an ugly tenant
liability lawsuit, what does renters insurance cover are your legal
fees and any damages that are awarded to other party (including his
medical bill claims and legal fees).
Now that you
know what does renters insurance cover, find out how much is renters
insurance and why you need renters insurance:
|
|
