13 Aug 4 Reasons You Can’t Live Without Renter’s Insurance
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When people rent a home, they might expect that the homeowner’s insurance policy will cover them in the event of damage or disaster. How many of them have actually seen the policy to make sure?
These four reasons show that renter’s insurance is vital for a tenant’s health and sanity:
1. Homeowners Often Lack Coverage
It is plain to anyone who has ever read a news article in the aftermath of a disaster that many people are unaware that their homeowners insurance had limits.
In fact, there are many types of coverage and causes of damage that the standard homeowners insurance does not cover. The biggest problem is that many homeowners are not aware of the stipulations made by their coverage.
For example, the Insurance Information Institute notes that most policies do not cover against flood damage.
Renters who rely on the homeowner to provide adequate coverage for:
may be left out in the cold.
2. Owners Insurance May Not Cover Tenant Possessions
Understanding what a landlord’s homeowners insurance covers is a matter of practicality, and one that many tenants overlook.
When a person decides to rent out a home, they will often keep up the insurance on the property and the structure itself.
However, they may also take down coverage inside the home to the bare minimum, expecting tenants to get their own insurance for possessions.
To avoid a nightmare of claims and mistaken expectations, renters should obtain insurance to cover their own possessions. This includes riders for any items of special value as well as possessions that are often taken outside of the home (e.g. laptops, cameras).
3. Insurance Requires an Assessment of Value
To establish how much the possessions are worth, renters have to evaluate what they have and what it may be worth.
The National Association of Insurance Commissioners highly recommends that tenants consider what they would rather receive in a claim: the replacement cost of the item or the actual cash value.
For items that maintain their value or even appreciate, actual cash value may be acceptable.
Most belongings depreciate, and may not be worth anything after several years.
When they get renter’s insurance, tenants should consider all their possessions for current value and make a list to give to the insurance agent.
This way, they have written evidence that they owned an expensive painting or diamond ring before it comes time to make a claim.
4. In the World of Insurance, More is Always Better
The world of insurance is based on estimates.
In that case, it is generally easier to plan to need more than to avoid getting enough. Disaster is never a good time to find out that the coverage was highly inadequate.
The best solution is to get recommendations from an insurance agent about the most common types of damage and disasters in the area, and make sure that coverage in those areas is comprehensive.