Home renters Insurance – Understand the basics
When moving to a brand new place, renters insurance is generally the last thing many people consider. Cable tv, internet and telephone seem to be the main concern for the majority. Many people today do not appreciate that the landlord’s insurance policy only insures the building itself and not their personal belongings. If you need a peace of mind knowing the content of your home is covered by insurance, you have to have renters insurance. It can be incredibly costly to replace your valuable possessions or defend yourself against liability lawsuit.
HO-4 and HO-6 are the two basic types of home content insurance. The former is for people who rent and the later for condo owners. Robbery, fire, criminal damage and smoke are some of the things these policies will protect you against. Nevertheless, floods and earthquakes usually are not included by default. If you have to be protected against floods and earthquakes, the insurance company will take into consideration the risks and may provide you cover at extra cost obviously.
When determining the total value you want to insure your assets against, there are 2 important elements. Actual cash value (ACV) and replacement cost coverage. No doubt, you can easily guest what these phrases mean, but lets explain them briefly. If you bought a laptop for $600 a couple of yours ago and it gets damaged today, ACV will be much lower because the item has lost some of its value. On the other hand, replacement cost coverage will pay out as much as it costs to purchase a new notebook from the shop.
However, you will have to pay extra if you want replacement cost coverage. Some argue that its much better value for money to get ACV regardless.
Its a common practice for very valuable items, like antiques and jewellery, to be mentioned on the policy explicitly. Obtaining receipts for all the expensive items could be beneficial, and why not even take a few photographs or make a video.
If your home is damaged – what happens?
In case your place of residency becomes unliveable due to fire or smoke, your renters insurance policy will cover your “additional living expenses” (ALE). You may have to temporarily live in a hotel or another apartment within the same price range. Generally, the limits for ALE are 30-40% of the total insurance policy value. Its unusual for repairs to take more than a few weeks but most policies have additional living expenses cover limits of as much as 1 year.
Renters liability cover is another typical benefit. What does renter’s liability cover, you may ask? It covers you in case somebody gets hurt in your apartment and decides to take legal action against you. This part of the insurance policy, as you may guess, has limits too – do keep them as high as you can as legal actions are not cheap!
Simply how much does home content insurance cost?
The truth is that it actually depends. Aside from the important factors stated previously, your credit rating and age can play a role as well. To discover exactly how much it is going to cost you, you need to compare insurance quotes from different insurance providers. Bare in mind, the cheapest quote is not necessarily the best. Always check out the limits and type of cover included in your insurance policy.
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