If you are renting a house or an apartment, you might consider getting renters insurance. This type of insurance is something that many people overlook, because, unlike homeowners insurance, there is no mortgage company requiring you to purchase it when you start renting. It is a form of protection for yourself, and your property.
Your landlord should have insurance on the apartment building, or house, that you are renting. Their policy will cover the cost to repair damage to the actual structure, as well as to the parking lot, sidewalks, and other common use areas of the building. It does not cover the cost of replacing any of the property you own that is located inside the apartment, (or house, or room), you are renting. If a disaster happens, your landlord is not going to help you replace your furniture, clothing, or other belongings that were stolen or damaged. Neither will your landlord’s insurance policy. Instead, a renters insurance policy can help with that.
Renters insurance covers the cost of replacing personal property that is located inside your apartment or rented home. It also covers medical and legal expenses in case someone who comes to visit you is injured in your apartment. Often, the landlord’s insurance policy will cover the medical expenses of a person who was injured in the parking lot, hallway, or other common area of the building.
Your renters insurance policy will have several “named perils” that you will be insured against. These often include fire, lightning, windstorm, smoke damage, vandalism, theft, weight of ice snow or sleet, and accidental discharge of water (such as when a pipe bursts), and more.
You need to find out if your renters insurance is going to give you Actual Cash Value (ACV), or replacement cost coverage in case your property is damaged or stolen. This is important, because it determines how much you will get to replace the item. For example, let’s assume you bought your television three years ago. This television is stolen from your apartment. If your renters insurance gives you actual cash value, you will only be getting what it would cost to replace that television today. It doesn’t take into account what you paid for it when it was new. On the other hand, if your renter’s insurance gives you replacement value, it takes into account what it would cost, today, to get a new television. In general, you will get more from the replacement value than you would get from ACV.
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