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What Renter's Insurance Covers
- Renter's insurance may cover:
- Theft.
- Fire.
- Smoke.
- Hail.
- Wind.
- Ice
- Snow.
- Sleet.
- Lightening.
- Volcanic eruption.
- Vandalism.
- Electrical damage.
- Water damage from utilities.
- Lawsuits regarding injuries and damages to another individual or an individual's belongings that occur on your property.
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What Renter's Insurance Won't Cover
- Renter's insurance will not cover everything.
- Read your policy's fine print.
- Make sure you are aware of limits and exclusions.
- Keep in mind, most policies will not cover flood damage.
- If you are at risk for floods, you will need to purchase a separate policy.
- Most policies will also not cover earthquake damage.
- If you are at risk for earthquakes, you will need to purchase a separate policy.
- The policy will have a maximum coverage limit so if you have expensive items, make sure the full cost will be covered.
- If the item exceeds your limit, you will need to buy additional coverage.
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Step 2: Determine the Type of Coverage You'll Need
- First, you need to know that there are two types of policies:
- Actual cash value (ACV).
- Coverage considers deprecation value and will only pay you what your belongings were worth at the time they were damaged or stolen.
- Usually the payout is less than it will cost to replace the item.
- Replacement cost.
- Payout is the amount that it will actually cost to replace your items.
- The premium is usually more than for ACV policies.
- Next, you need to:
- Decide if you want liability coverage.
- Liability coverage will protect you from lawsuits if someone is injured in your home.
- Liability coverage will also cover damage to other individual's belongings if the damage occurs on your property.
- Decide if you need coverage for additional living expenses if your home becomes unlivable.
- Decide if you want a higher deductible.
- The deductible is how much you will pay if your belongings are damaged or stolen.
- A higher deductible will mean lower monthly fees but also a lower payout when you need coverage.
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Step 3: Research Insurance Companies
- Now that you have an idea about what you will need in an insurance policy, it is time to shop around for the best deal.
- Check with your auto insurance company to see if they can offer you a good deal.
- Some insurance companies offer discounts for installing smoke detectors, burglar alarms and fire extinguishers.
- Call insurance companies and ask about their standard renter's insurance policy terms.
- Ask about limits, deductibles and coverage.
- Compare quotes and choose the best deal.
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Step 4: Take Inventory
- Before you purchase Renter's insurance, you will need to take an inventory of your personal belongings.
- List:
- The item.
- The value.
- The serial number.
- Photograph or videotape:
- Every item, including:
- Jewelry.
- Electronics.
- Every room, including:
- Closets.
- Drawers.
- Every item, including:
- Calculate the worth of your belongings.
- Once you determine the worth of your belongings, you can decide how much coverage to purchase.
- Keep receipts.
- Store documentation:
- In a fireproof box.
- In a bank safety deposit box.
- Online.
- In a digital file.
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