If you live in an apartment and a candle tips over and starts a fire, who is responsible for the damage? What if a thief breaks in and steals your TV and other electronics? Is your landlord responsible to replace those items?
In both scenarios YOU, as the renter, are responsible for the damage or loss.
In the last two posts I have covered auto and homeowners insurance. These week I will conclude this series with a post about renters insurance.
Renters insurance typically covers theft, vandalism and fire (or smoke) damage. Some policies also cover water damage. Pipers bursting, sewage backup, earthquakes, floods and other “Acts of God” are typically not covered.
The three main parts to a renter’s policy are:
- Contents
- Loss of use
- Liability
Contents
You may not think you have much of value, but the average renter has about $30,000 worth of “stuff”, from furniture to clothes to electronics.
Renters insurance will replace items stolen or damaged by a covered event.
You can get Replacement Cost coverage or Actual Cash Value coverage.
Actual cash value takes into account depreciation. For example, let’s say you own a $5,000 TV that typically lasts for 10 years. If that TV is stolen after 5 years you will get $2,500 for it from the insurance company.
With Replacement Cost coverage you will typically get a check for the actual cash value (in our example above you would get $2,500), then when you submit a receipt you will get a check for the remainder, up to a set dollar amount.
You should always get Replacement Cost coverage if it is available.
Most policies cover your items while you are travelling and some will cover items in your vehicle as well.
Before the insurance company will pay anything you have to pay your deducible. The higher your deductible, the lower the premiums will be. Be sure you have a deductible you can afford, though.
To prove what you own you should have pictures or a video of your contents. You may also want to have a list of what you own and how much you paid for it.
Contents coverage will typically only cover a limited dollar amount, so if you have an expensive or valuable item make sure your insurance agent knows about it and you can get additional coverage for it.
Loss of Use
If you have water, fire or smoke damage your apartment will typically be uninhabitable for some period of time while it is being repaired.
Loss of use will cover your rent in a similar apartment or hotel for a limited period of time.
Liability
Liability coverage will typically cover legal costs, bodily injury and property damage caused by your actions or negligence. It will also often pay a set amount for medical payments for your guests who are injured.
Cost
You will pay a monthly or annual premium for your coverage. Average policies cost between $15 – $30 per month.
For those that live in Utah, get in touch and I would be happy to get you a quote for renters, auto or homeowners insurance.
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