An important consideration when buying a renters policy is whether to buy an actual cash value renters policy or a policy that covers the full cost of replacement.
With actual cash value coverage, insurers depreciate lost or damaged items based on their age. For example, if you owned a 10-year-old couch that was stolen, the actual cash value would be the cost of buying a used couch of comparable age and condition.
If your policy includes replacement cost coverage, your insurer would pay based on the cost of a new couch of the same quality without applying depreciation.
One of the most important coverages included with a renters insurance policy is personal liability coverage. Just like homeowners insurance, renters policies cover your liability for injuries or property damage that you, your family members or your pets may cause to others.
For example, if somebody were at your house and slipped and was hurt, you could be held financially liable for their injuries. However, the liability section of a renters policy would pay for your legal damages, up to your policy limits if you are found to be negligent and caused the injury. The policy would also pay for your legal defense.
Be sure to choose a renters policy with liability limits that are high enough to protect your personal worth.
Renters insurance policies are relatively inexpensive, considering the broad protection they offer. The cost is low because renters don't need to buy insurance to protect their homes, only the contents. At General Insurance Services we can write your renters policy with great companies like Mercury or Travelers for a premium as low as $125 a year. In addition, most companies give a multi-policy discount on your auto insurance if you also have your renters insurance through them.
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