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Why Get Renter Insurance

By Mike Heuer

- Definition of Renter Insurance

Renters insurance protects your belongings and finances against perils such as weather damage, lawsuits and burglaries. While the owners of the property you reside in have homeowners insurance to replace the building, their policy will not cover any of your belongings. Your renters policy steps in to take care of your needs.

- What Renter Insurance Covers

Let’s start with the obvious. Your policy will replace clothing, furniture, books, wall décor and other belongings destroyed during a covered peril. But your insurance doesn’t stop there .If your dog bites the neighbor when he comes over to visit, the policy covers the medical bills. Should the neighbor then sue you for pain and suffering, most policies have a provision to protect you against personal liability. The insurance company will defend you in the suit and then pay out the judgment if you lose. Of course, each of these areas in your policy will have a dollar cap on how much the company will pay. This makes it very important to purchase the right amount of coverage within the legally allowable amounts.

To accurately choose coverage limits for your renter insurance policy, you must put a dollar value on everything you own that will be inside your home or out in your yard. A good way to start is to walk through the house or apartment and photograph each room and yard area from different angles. Examine the photos and list each item that is in each photo. After you have the list, you can check the Internet to determine a replacement values and write that number next to the item on the list. At the end, total all of the numbers and know how much property replacement protection you should have in your policy.

If you have unusually valuable items such as a diamond ring, fur coat or seriously expensive computer, get a rider to cover it separately. The value of such items will often push the total replacement coverage need beyond the allowable limits. Getting a rider on those individual items is a way to circumvent the problem. Each rider specifies the value of that item and covers that item only.

If your home is burglarized, stolen items will be covered as long as you file a police report and provide a copy to your insurance company. In addition, damage caused by fire, hail, windstorms (such as tornadoes or hurricanes), vehicles, riots, explosions, smoke and volcanic eruption, are also covered. Be aware, however, hat damage caused by flooding is not covered. For example, a hurricane rips your home apart and wind takes your wall hanging and it is gone. The wind also bends the metal frame on your canopy bed. Then your place floods and the flooding destroys your television and stereo. The insurance company will replace the wall décor and bed canopy damaged by the wind, but it will not replace the electronics, due to the fact they were damaged by a flood. You must have a separate policy for flood or earthquake damages.

Replacement Housing

Most renters policies provide coverage for temporary housing in the event you are displaced during a covered event. If your apartment is destroyed by fire, for example., the policy will provide funds for you to stay in another location. Most policies have a cap for living expenses of 50 percent of the policy value. In addition, your insurance company will place a limit on how long it will pay for this expense, usually 12 months.

To further reduce the premium on a potential renter insurance policy, you can adjust the deductible. A deductible is the amount of money you pay out of pocket before the policy has to kick in. The higher your deductible, the lower the premium.