About Home Insurance
One need only turn on the nightly news with its never-ending list of disaster stories associated with
fire and weather to know the value of home insurance. If you own a house or condo, you are protecting
what is likely to be your most valuable asset. If you rent, you still have furniture, clothes,
electronics and other possessions to protect.
Home insurance helps protect your assets by providing the money you would need to rebuild your
home and/or replace your valuables should disaster strike.
Renters Insurance
If you are currently renting an apartment or home, you don't have financial responsibility in the structure itself, but you will want to protect your personal possessions. In most cases, renters insurance is one of the least expensive insurance policies you can buy, and so protecting what may be your largest set of assets outside of a car is highly recommended.
- How Much Renters Insurance to Get:
Make an inventory of what you own --- furniture, electronics, clothes, etc. to determine the coverage amount you'll need for personal property. (Other parts of the policy, like personal liability and loss of use have common limits that most people elect).
- How to Buy:
As with other types of insurance, different renters insurance companies will evaluate the same risk differently. The easiest way to get the lowest premium is to use an online quote service to compare. Fill out just one form --- and let the insurance companies come to you. This approach also makes things easier for the future --- you can just return to your profile and periodically check to make sure you have the best price.
Coverage Issues to Consider
- Know what's covered and what isn't
- What's Covered in Renters Insurance?
Most renters insurance policies will cover you for damage caused by things like fire, lightning, smoke, vandalism, hail, theft and electrical surge damage. It will also include some provision for loss of use, reimbursing you for some living expenses if you are forced from your rental unit. Finally, the rental policy will cover you for some level of personal liability, associated with someone suing you should they have an accident occurring in your apartment.
- What's Not Covered in Renters Insurance?
Earthquakes and floods are excluded in most cases; this coverage must be purchased separately. Automobiles are not covered; you should protect those with auto insurance. Your pets aren't covered and you aren't covered if your negligence caused the loss.
- Replacement Cost vs. Actual Cash Value
- Replacement cost coverage insures you for the cost to replace your loss, while actual cash value only covers you for what you originally paid, less an allowance for wear-and-tear. For example, if you bought a big screen TV five years ago for $2,000, that particular TV might only be worth $500 now. With actual cash value, you are insured for $500. With replacement cost, you will be able to replace that TV with a new one, comparable to the one lost. Replacement value is recommended, although it does cost more.
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