For renters, the issue of insurance can be a bit tricky. Sure, the property and its owner has insurance, but the insurance will only protect the building, not the people who live there nor their belongings.
Fortunately, home buyers are not the only ones who have access to insurance. Unknown to many, renters also have insurance that may protect them and their belongings in case of a tragedy. Below are the basics of a renter’s insurance.
The basic
Just like any insurance, renter insurance protects renters and their possessions against loses because of fire, lightning, vandalism, theft, explosion, etc. This insurance can also cover the expenses in situations when you can no longer live in your apartment because of an incident mentioned above. However, renter insurance does not cover instances that are caused by “earth movement.” Below are some examples:
- Flood
- War
- Nuclear hazard
- Failure to save the property
- Seizure of property from the government
Actual cash value
There are two types of financial help that you can get from a renter insurance. The first one is Actual Cash Value or ACV. ACV coverage will only pay for what the item is worth during the time that it was damaged. For example, if a microwave was perished in fire, the ACV coverage will only pay for its current price not the price when it was bought.
Replacement cost
The second type is replacement cost. This type of coverage works best for things that have higher value. Replacement costs will actually pay for the original price of the material. It costs more than AVC but the return is so worth it.
Floater
You can customize your insurance policy the way that you want it to be. If your property exceeds the limit of the coverage, then you have the power to add a floater that may fit to your other insurance needs. Floaters are separate policies that protect your other belongings just in case that you already reached limit of your coverage.
Get an insurance today to protect your belongings!
