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Renters Insurance: Finding a Policy That Works for You

Insurance is important for both homeowners and renters.

However, while homeowners are covered by their own policies, renters aren’t always covered under their landlord’s insurance policy; at least not when it comes to the personal items inside the house.

If you are renting, renters insurance can protect your belongings in the case of disaster.

There are generally two categories when it comes to renters insurance, liability insurance, and property insurance.

Liability insurance can protect you from a lawsuit, should your personal property cause damage or injuries to another person while they are visiting you in the home you are renting.

Property insurance is designed to protect your personal property and belongings in case of damage or theft.

Property Insurance

Even if you are an ideal tenant, keep in mind that some rental property damage is caused by events that are beyond your control. Even if you are careful, in some cases events such as storm damage, flooding, fire, or even just normal wear and tear can cause damage to occur. Renters property insurance also covers your belongings in the case of damage caused by others to your personal property. It also covers theft.

Liability Insurance

Liability insurance is an important coverage to have. In the event of a visitor or guest sustaining an injury or damage to their belongings while they are on your rented premises, renters liability insurance protects you from any legal action that may be taken against you. It helps protect you from liability and potential lawsuits that could total into the tens of thousands.

Some landlords require their renters to have a renters insurance policy that includes coverage for negligent destruction of the landlord’s property.

There are two basic levels of coverage for insuring personal property. One is replacement cost value (RCV). The other is actual cash value (ACV).

Replacement Cost Value Policy

Replacement cost value policies will give you enough money to replace your items at the current market price. RCV plans cost more, but they will pay more in case something happens.

Actual Cash Value Policy

Actual cash value policies don’t pay you as much. They take into account your item’s age, wear and tear, and the fact that over time, your items have depreciated. As a result, the insurer will reassess your items, and give you the cash value that they determine it is worth.

As with any policy, the level of coverage and type of coverage vary considerably. It’s best to check with your insurance agent if you are uncertain of your policies coverage. At Katy Insurance, we would be happy to discuss policy options with you, and find a policy that is exactly suited to your needs.