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Cover your belongings with renter's insurance
Bankrate.com staff
The hunt was successful and you found the perfect
rental. Your new Ethan Allen furniture and home stereo system are
styling in the new place. Now that you're settled in, you're thinking
it's time for a vacation. Not so fast.
What happens if someone decides to break in and steal
your state-of-the art sound system while you're off hula dancing
in the tropics? Without renter's insurance, you might be out of
luck and out of a stereo system. A renter's policy covers the walls
that surround your personal belongings, but not loss or damage to
your personal property.
"Renter's insurance is important for protecting your
belongings. Renters often have the misconception that a landlord
is responsible for lost or damaged property and that's just not
the case," explains John Simms, operations manager of the American
Renters Association (ARA). Renter's insurance, also known as tenant's
insurance, is a type of homeowners policy that protects you and
your property both inside and outside of your home.
The type and cost of the plan you purchase is based
on your individual needs. An estimate of the value of your personal
property will determine the amount of coverage you should purchase.
When estimating this value, be sure to include everything from jewelry
to pots and pans.
Once you've valued your personal belongings, it's
time to put in the calls. The ARA can give you insight into affordability,
dependability, and customer service for the leading insurance providers.
Types of coverage
When you receive estimates for insurance policies,
make sure you write down the types of coverage included in the policy.
Most insurance policies offer three types of coverage: personal
property coverage, liability coverage and replacement cost coverage.
Personal property coverage protects your personal
property against fire, smoke or lightning, burglary or vandalism,
riot or civil commotion, explosion or electrical surge damage, windstorm
or hail, falling objects, and other hazards described in the individual
policy. What if your $200 CD player gets stolen while you're away
from home? Your property is covered at home and away up to a maximum.
Check with your insurance provider for details.
And what if you just get back from picking up your
new CD player when the doorbell rings. The exterminator comes in
and slips on the kitchen floor before you can tell him it's wet.
How will you cover his hospital costs? The second type of coverage
-- liability -- offers you financial protection against suits for
accidental bodily injury or damage to property while in your home,
caused by your activities or by your children or pets.
Replacement cost coverage, the third type of coverage,
is additional protection that ensures that if loss occurs, you will
be reimbursed for the full cost of repair to replace your property
at today's cost, provided it does not exceed the policy limit.
Protecting your wallet
Renter's insurance is a fairly cheap way to protect
yourself and your belongings. Policies range from $75 to $400 per
year depending on the desired coverage. The ARA lists a policy for
$179 to cover $10,000 of personal property and $25,000 of personal
liability coverage.
Like other insurance policies, renter's insurance
may offer discounts. The presence of dead bolts, security systems,
smoke detectors and fire extinguishers in your rental property can
result in a small insurance discount. Purchasing your renter's insurance
from the same company that provides your automobile insurance might
make you eligible for a dual-policy discount.
Whether it's peace of mind or high rates of burglary
that prompt the purchase of renter's insurance, make sure you get
the best deal for your money. It's important to protect your personal
property -- including your wallet.
-- Posted: July 21, 1998
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