The following is an article by Natural Resources Management president Tracy Suttles, a figurehead in the Houston, Texas real estate development scene.
Renters property insurance is like any other form of coverage, it only seems important when it becomes necessary to make a claim. Whilst paying for a policy cannot be considered an enjoyable activity, it is a lot better than facing the consequences of liability for injury or replacing all personal possessions in the event of theft. For those on a fixed budget, the cost of home renters insurance can be reduced by increasing the deductible so that only the most troublesome financial problems are covered.
Protect Items of Value with Renters Property Insurance
There is a high probability that something bad will eventually happen to someone’s personal property. Renters home insurance typically offers two alternatives: the ‘replacement cost coverage’ or ‘actual cash value’ (ACV). A policy offering the ‘actual cash value’ will only provide a payment equivalent to its current replacement cost. However, ‘replacement cost coverage’ will pay the insured a sum of money that will cover the full cost of it being replaced. Although more expensive, the latter option is more comprehensive.
Renters Home Insurance Provides Liability Protection
If an individual were to sustain any sort of injury whilst in the insured’s apartment, the policy (subject to any limit in-place) would provide a payment equivalent to the cost of damages and medical expenses. Court costs (if applicable) would also be covered. Without this protection in place, a tenant could find himself owing tens of thousands of dollars. It could even bankrupt them. However, insurance for renters can help to manage this risk and provide genuine peace-of-mind for the tenant and his/her guests.
Renters Insurance Coverage and Unlivable Premises
A renters property insurance policy provides assistance when a property can no longer be lived in due to damage, a rebuild or relocation. This means that if the insured has no choice but to move out because it is unlivable, the policy will cover the cost of living in a comparably priced house, condo or apartment. The limit is typically limited to 30-40% the policy value. Thus, someone insured for $150,000 would have an additional living expenses limit of between $45,000 and $60,000. Other providers allow the insured to claim for a maximum of up to 12 months or for a “reasonable length of time.” Each policy document should be checked for the specifics.
The Value of Renters Property Insurance
Life can be very unpredictable, but renters home insurance provides a way of underwriting that risk. Although it isn’t a legal requirement, it is important to appreciate that the landlord is not responsible for a tenant’s possessions or what happens to visitors at that property. Insurance for renters not only covers home contents, it also provides protection should something happen to a visitor. It is essential for anyone who lacks sufficient financial resources to cover such costs or liabilities.
Tracy Suttles can be reached on Twitter at @tracydsuttles.