How is Renters Insurance like Homeowners Insurance?
Whether you own your own home or rent from a landlord, fire still burns. Furniture, family photos, and coveted heirlooms can never fully be replaced, but by insuring these items you can protect your assets in the event your possessions are stolen or destroyed. One mistake many renters make is assuming that, since the landlord is insuring the building they live in, their personal property is also covered. Understanding how renters insurance and homeowners insurance works, knowing the similarities and differences, and understanding what to look for in each policy are the first steps in protecting your belongings.
If you own your own home it is imperative to insure both the house itself and the items within it; including people. If a fire destroys your home, your homeowners insurance will pay to fix the home. Generally, as long as at least 80% of the home’s worth is insured, most policies will actually restore or rebuild the home. The policy will also replace the possessions which were lost. In addition, most insurance policies include a liability clause that covers the cost of medical bills relating to the fire. Basic policies cover anywhere from eleven to seventeen threats including fire, lighting, hail, theft, vandalism, civil commotion, glass breakage, and even volcanic eruption. In the event the home is unlivable while repairs are being made, many policies cover living expenses such as renting a temporary residence as well.
Renters insurance is very similar to homeowners insurance with one main exception. Most landlords have insurance that will cover the loss of their buildings, but not your belongings. In the event your domain were to experience many of the same perils covered by homeowners insurance—excessive wind, smoke, theft, falling objects, or lava flows—the resulting damage to your belongings is covered only if you purchase renters insurance. As with homeowners, most renters policies cover liability in the event someone in harmed while in the residence. Though renters insurance does not cover the building itself, there are certain policies that will cover improvements renters made to the dwelling. Another way renters insurance is similar to homeowners insurance is that it will often pay for relocation if the property is unlivable.
Important Tips for Purchasing Renters Insurance and Homeowners Insurance
First, familiarize yourself with all of your policy’s covered perils. Few policies automatically provide for flood damage, nuclear devastation, earthquakes, or the results of war. These perils often require a separate policy. Second, understand the difference between Actual Cash Value and Replacement Costs. Actual cash value will reimburse you for the price you paid for the item. For example, a computer purchased for $1000 five years ago will cost significantly less today. Your computer credit may only be $300. It always costs more, but having insurance that replaces your possessions at the current market value is very wise. Third, it is always a good idea to have documents listing your personal property in order to validate claims. Compile a list of all possessions, retain important receipts, write down serial numbers, and even take pictures or a video of every room, drawer, and box in the house.
In the event of an inconveniencing hailstorm or a cataclysmic fire, insurance gets you back on your feet. Don’t wait any longer to protect your hard earned assets; enter your zip code at the top of the page for your free homeowners insurance or renters insurance quote.