What is Renters Insurance?

September 18, 2009

Take a serious look around your rental. Do you see expensive electronics, furniture, a closet full of trendy clothing and other valuables? Just suppose there were a fire in your building and everything you own were lost. Would you be able to replace it all without a financial meltdown? Expect to be surprised when you calculate the figure for what everything cost.

Depending upon the conditions of your specific renters insurance policy, it will pay to repair or replace stolen, damaged or destroyed personal property. Events covered in most policies include most severe weather conditions, electrical surges, and water-related damages from inside utilities. Other problems are covered too, such as falling objects or broken glass. However, floods and earthquakes are never covered as standard perils.

If your rental should become unlivable due to a covered loss, renters insurance can provide for "additional living expenses," often for up to one year, if you are forced to find temporary living space. Also important is having liability coverage. Suppose someone is injured inside your rental and he or she files a lawsuit. You may be liable for potential damages, legal and medical bills. This coverage can be added to renters insurance up to a specified amount.

There are two other terms you should understand: actual cash value (ACV), and replacement cost coverage (RCC). ACV refers to the value of your possessions at the time they were lost. RCC means the amount of money it would cost to replace everything that was damaged or lost at today's prices; this coverage costs slightly more than ACV coverage.

Many variables determine the amount of your premium. The location where you live, the deductible you choose, and the number of special riders you require factor into this cost. There are also ways to get discounts. Protective devices in your rental like smoke and fire detectors count in your favor.

Take a few minutes to get a free no obligation renters insurance quote from Homesite and see just how affordable it can be.