MONDAY, AUGUST 31, 2020
Renters insurance is anoften misunderstoodtype of insurance. While other policies are usually legally required by the state,rentersinsurance requirements are instead left to the landlord and tenants. Landlords determine how muchrentersinsurance tenants must carry. These requirements should be explained on the lease and agreed upon between both parties. How Much Renters Insurance is Usually Required? Renters insurance requirements vary per landlord and location. On average, most landlords require tenants to carry $100,000 in liability and at least $10,000 in personal belongings coverage. This is to help those injured or who have their property damaged by another tenant as well as to keep the landlord clear from blame concerning an accident between tenants. Requirements aren’t the only thing that determine how muchrentersinsurance you should carry, however. Replacement Cost Value There are three main parts of renter’s insurance, one of which is personal belongings coverage. This coverage provides compensation if your personal belongings are lost or damaged due to fire, wind, hail, explosions, theft, vandalism and more. It’s important, however, toknow exactly how much of this coverage you need. Although many renters believe they don’t have much by way of belongings, the average tenant has about $35,000 worth in belongings.
Knowing the value of your personal belongings is the first step. Once you know the value of your items, you can choose what kind of policy you want. Renters insurance policies come in two types when it comes to personal belongings coverage:actual cash valueandreplacement cost value.
Actual cash value policiesprovide compensation for lost or damaged items based on the cash value of those items. This accounts for depreciation, which means that ass the value of your belongings goes down over time, so does the amount of compensation you can receive. For example, say you purchase a laptop for $1,000. A few years later, a fire destroys your belongings, including this laptop. The value of the laptop has dropped to $500. In this case, you will only receive around $500 for your laptop. Actual cash value policies are generally cheaper, but they’re less likely to provide enough compensation to replace your belongings completely.
Replacement cost value policies, on the other hand, provide compensation without accounting for depreciation. If you lose your $1,000 laptop, it doesn’t matter how its value goes down over time. Instead, the insurance agency will provide enough compensation to replace the laptop with one of equal or similar value.
Liability Insurance Needs
No tworentersinsurance policies are the same. This is because no tenant is the same. This is especially true for liability coverage. Although most landlords only require $100,000 in general liability, you may need more depending on your circ*mstances and lifestyle.
General liability insurance is designed to cover bodily injury and property damage that you or a family member may cause to someone else. This can often include pets and helps cover medical expenses for the victim. It also covers legal fees for you if a lawsuit results in the accident.
Sowhat makes the difference between low liability and high liability, and who needs which?
Certain lifestyles require higher limits of liability insurance. If you tend to throw parties, frequently have friends over or engage in risky activities with your friends, you may need higher limits of liability. A single accident can cost thousands or millions of dollars—especially when other people’s medical bills are involved. Medicalservicesare expensive at the best of times.If someone is injured and even disabled, you could be sued for paying continuous expenses related to the accident.
Carefully consider the risk you and your family face when it comes to liability. Having pets can raise the risk of a claim, especially dogs. Even the sweetest of dogs have their limits on patience and can get scared or nervous. Dog bites can result in bad injuries, dismemberment and even death. Make sure your furry family members are covered by yourrentersinsurance policy.
Overview
Essentially, both you and your landlord are responsible for deciding onyourrentersinsurance coverage limits. Be sure to speak with your landlord about the requirements on your lease and decide if you need more coverage. Keep in mind that many renters insurance policies have exclusions for certain accidents and items such as floods, earthquakes, art, furs and jewelry.
Posted 12:25 PM
Tags: renters, insurance, policy
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