Friday 7 June 2013

Why You Need Renter’s Insurance

Unless damage to your property is caused by a pre-existing condition that your landlord was both aware of and had time to repair before the incident, nothing under their insurance is going to cover your loss. Even if you believe you have a case against a landlord’s policy, the chances are very good that their insurance company has already covered any contingency loopholes so thoroughly that receiving compensation would entail a long and drawn out legal battle.

With extreme weather becoming a fact of life in many urban areas, it’s time to come to terms with just how vulnerable your personal property is without renter’s insurance.

Though you might worry about the cost of a policy, the truth is that most renters should easily be able to pay less than $300 per year for $50,000 or more in property coverage. The average policy will cover nearly all non-flood damage, including the following:

§ Damage caused by smoke and fire, including ignition via lightning or explosion
§ Damage caused by wind or hail
§ Damage caused by cars or other vehicles
§ Damage caused by vandalism or civil unrest
§ Damage caused by glass that’s part of the building’s structure
§ Damaged caused by the building’s plumbing
§ Damage caused by volcano
§ Damage caused by earthquake, unless you live in an area known to be prone to earthquakes

Flooding related to plumbing or storm damage will typically be covered. Flooding “from the ground up,” such as a flooded river or city infrastructure, will not. Renters, like homeowners, will have to seek out the governmental National Flood Insurance Program for coverage in that area.

When researching coverage take special note of its compensation policy, particularly whether it consists of replacement value or actual value. Under replacement value you will be covered for the amount required to actually purchase a replacement. Actual value, in contrast, will only cover the value of the item at the point it was damaged. This could hit your wallet hard if you’ve owned the item for some time and its resale value has depreciated below the dollar amount required to buy a brand new replacement.

Be aware of any coverage limits for specific types of items. Many policies will cap compensation for jewelry and other fine valuables, as well as most electronics.
Once you’ve secured coverage be sure to take the same precautions you would for any type of property insurance to make filing a claim easier. Take an inventory of all the property in your apartment, including its purchase price and your best estimate at its current value. For particularly valuable items it’s also a good idea to take photos of the object and its place in your apartment.

In the event that your apartment suffers damage, be sure to notify your insurance company immediately. Though your landlord will likely be filing a claim with their own insurance company if damage was done to the building, it’s necessary to get your own claim process started as soon as possible.

When a disaster or mishap strikes, the very last thing you want to be left with is damaged property that will have to be replaced out of pocket. By being a conscientious tenant and making sure your belongings are covered by the appropriate policy, you can keep a potential tragedy from becoming an even worse situation.

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