Renters Insurance Policies

Renters insurance offers tenants financial protection in the event of destruction or loss of their possessions when renting an apartment or house.  Although in the case of a burglary or fire, your landlord might show some sympathy, their insurance usually won’t cover loss or destruction of your possessions.

When obtaining renters insurance, it’s essential that you take inventory of all your possessions you wish to cover and assess the value of each for replacing them should accidental damage, disaster or theft happen. This type of insurance will cover your belongings against loss from vandalism, theft, smoke, fire, windstorm, lightning, water damage (excluding floods) and more. Similar to homeowners insurance, you are covered under renters insurance if someone should get injured on your premise and file a claim.

Depending on your policy, additional types of damage could also be covered. Earthquakes, hurricanes, and floods are typically not covered under renters insurance, therefore you might wish to buy a separate policy.

Renters insurance comes with two basic policies: replacement cost and actual cash value coverage.

Replacement cost coverage is generally going to be a little higher in rates since it pays out more.  Actual cash value will pay the cost of replacing your possessions, but only at depreciated value.  It’s important that you really understand the distinction between both of these before deciding on which coverage you want.

The Two Types of Renters Insurance Policies

Replacement Cost

Replacement cost will pay for replacing your damaged, destroyed, or stolen possessions at full value without deducting for depreciation. This is often estimated as the amount you originally paid for the item.  If this particular item is not available any longer, you will still get the original price you paid for it to find a similar item. Should the item you bought be available but the price for it has been reduced, the value for it might be reflected in your claim.

In some cases, the replacement cost might be paid in a couple installments. The insurer might often send an initial ACV payment for the item or half of the entire replacement cost.  After you have purchased a replacement, documentation will need to be sent in by you to the insurance company so they can send you the remaining amount.

Actual Cash Value

With actual cash value (ACV), the insurance provider will deduct depreciation from the item before coming up with a figure to reimburse you.  The item’s actual cash value will be the amount it is worth on today’s market. For instance, if you have a 10 year old TV, the actual cash value for it would be substantially low compared to a television that is only a year old.

Benefits of Each Renters Insurance Policy

The benefit of choosing replacement cost on your renters insurance is that your damaged item will be replaced fully at current market value.  No depreciation is deducted; however, you will have a slightly higher monthly premium.

The benefit of going with actual cash value on your renters insurance is that you will have lower monthly premiums since you will only get the depreciated value of your damaged items. However, you might not get enough reimbursement to fully replace your item.

Your independent insurance agent will explain the types of renters insurance policies available to help you decide which would be the best policy for your and for the protection of your belongings. Ensure you are getting every penny of coverage you require to prepare yourself for likely catastrophes.  Take inventory of your belongings and make a decision on which policy will be better suited for you and your loved ones.

By having renters insurance in place, you can live in your house or apartment with the peace of mind that if an unfortunate event should take place, your belongings are covered.  There is great value in this type of peace of mind.

NYC Renters, Co-Op and Condo Insurance