Most home owners don’t need to think twice about investing in homeowner’s insurance. When renters come into the equation it’s not so readily granted. The majority of mortgage companies demand that homeowners be covered by insurance, yet there are no demands in reference to renters. A host of renters fail to comprehend the need for renter’s insurance until it is too late. Renters need to cover their personal effects for peace of mind.
It is enlightening to learn the results of a consumer survey which was commissioned by the Independent Insurance Agents & Brokers of America. Their findings showed that two thirds of American renters fail to have renter’s insurance. In actual fact, a national consumer telephone survey which asked tenants in rental properties if they had renter’s insurance, showed that many had never even heard of it. On further investigation it was surprising to learn that 64% responded with a no when asked. And the misconception that it’s only fire a renter needs to be covered for is wrong. While fires seem relatively common to some, theft, vandalism, flood, and so forth are just as common. In actual fact, most claims against renter’s insurance are focused on theft and accidental damage.
Unfortunately many renters have the misconception that the property owners are responsible for insurance which will cover their personal effects, but they are not. In reality the property owner’s insurance only covers the building and its infrastructure, such as elevators and furnace. Fortunately for renters another misconception is that renter’s insurance is very expensive. When one learns that the approximate cost per month for $30,000 worth of property cover and $100,000 of liability coverage is $12 a month they are pleasantly surprised indeed. A host of policies cover liability coverage, and this means that if anyone is hurt within the home and you are liable, the could pay hospital and medical costs and even the lawyer.
There are two types of policies to choose from and these are, actual cash value or replacement cost. Actual cash value policies pay to replace possessions minus a deduction in lieu of depreciation up to the limit of your policy. Therefore if you purchased a computer for $2,000 five years ago, you will be given approximately $600 (its worth now.) This will not cover the cost of a new one with the prices of today. Replacement cost policies are exactly that, they pay the actual cost of replacing an item up to the limit of the policy. Therefore if it costs you $2,000 to replace an old computer that’s what you will get from your insurer.
There is not much difference in cost in reference to the two different policies. Just a few dollars each month. But large costly items will need to be documented and photographed and presented to the chosen insurance company with a special floater or rider added to your coverage. As you can see, renter’s insurance covers is a necessity which costs very little but gives you comfort in knowing that you are protected in lieu of loss of personal property.