rental insurance

The advantages of Renter’s insurance

A lot of uncertainty surrounds renter’s insurance. What is it? What does it cover? Is it worth the money? Despite its advantages, a 2014 Insurance Information Institute poll conducted by ORC International found that, among renters, only 37 percent said they had renters insurance compared to 95 percent of homeowners who had homeowners insurance. Being covered can make a huge difference in the event that something happens to your home and makes getting back on your feet a lot easier.

Renter’s insurance can be defined as a form of property insurance that provides coverage for a policyholder’s belongings and liability within a rental property. In short, renter’s insurance covers a great deal, (Liability, theft, damage to property, repairs, etc.)

The major points of coverage are Personal Property, Liability and Additional Living Expenses.

Personal property coverage is there to cover the expenses linked to replacing your personal belongings following a fire, burglary or other incident in the apartment. It applies to all daily use items, from the basic kitchen utensils to more expensive belongings.

Renter’s insurance also covers smoke or fire damage, vandalism, electrical issues, property stolen outside the property & damage from windstorms. It does not cover damages caused by earthquakes, floods or insects, nor does it cover damages done to the property by a guest.

Renter’s insurance, through its liability coverage also covers the cost of injuries sustained by guests in the tenant’s home. For example, if a guest injures themselves while in the property, the tenant is liable for medical costs and for costs linked to any potential lawsuit. Renter’s insurance can be used to cover the expenses when the accident was caused by the tenant’s negligence or actions

Additional living expense coverage protects from expenses caused by the inability to stay in the apartment. This includes the cost of living arrangements, eating out, and other expenses that stem from the fact that the apartment cannot be lived in. 

Compared to other insurance policies, renter’s insurance is relatively inexpensive. An average policy costs around $16 per month in New York City and covers up to $30,000 in damages, which means that for less than $200 per year, a renter can be protected from unexpected damages and burglary. 

Insurance is a service we pay for and hope we never need to use. It is important to weigh the cost of going without coverage and the renters insurance cost; spending a little each month now may save thousands of dollars in the future. Coverage differs policy to policy so it is important to compare offers and read the small print in order to be sure that all needs are covered. Once you have found your new home, Expat US can assist you with taking out renter’s insurance.

How to Choose Personal Property Insurance Coverage

Property insurance provides protection against most risks to property, such as fire, theft and some weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance, or boiler insurance.

Property is insured in two main ways—open perils and named perils.

Open perils cover all the causes of loss not specifically excluded in the policy. Common exclusions on open peril policies include damage resulting from earthquakes, floods, nuclear incidents, acts of terrorism, and war.

Named perils require the actual cause of loss to be listed in the policy for insurance to be provided. The more common named perils include such damage-causing events as fire, lightning, explosion, and theft.

You will need to make a decision about how to insure your belongings and choose coverage options to suit your individual replacement needs. There are mainly two types of insurance coverage—Replacement Cost and Actual Cash Value. Many of your belongings will decrease in value over time, so it's necessary to consider which to choose.

Replacement Cost coverage pays the cost of replacing your property regardless of depreciation or appreciation. Premiums for this type of coverage are based on replacement cost values, and not based on actual cash value.

Actual Cash Value (ACV) coverage provides for replacement cost minus depreciation. This coverage option may allow for the insured item to be replaced with a used item but not always a new one. Premiums for Actual Cash Value insurance coverage though generally cost less than those for the Replacement Cost coverage option. 

It is a good idea to walk around your home and look for items that you spent a lot of money on, or that have appreciated in value since you got them. Taking a picture to record those items financially or personally important will help you ensure they are protected properly.

Don’t forget to check for complaints or problems with the insurance agents that you are considering. Most states have an insurance commission website that you can check to see if an agent has any complaints against him. If an agent has several complaints, you should be skeptical about working with him. You also should check with the insurance agent to make sure that his license is up to date. Once you have found an agent that you feel comfortable with and has the products you need, make a selection and move forward.

Contact Expat US for more information and free consultation

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