Category: Renters Insurance

If you’ve started looking into renters insurance you may have noticed a few caveats. One that can be puzzling is that there are monetary limits for individual items. It may seem like the item should be covered for the amount that you paid for it, but that isn’t always the case or even possible.

Keep reading for a rundown of how limits are determined for individual items.

Replacement Cost and Actual Cash Value

One of the biggest factors is how an item will be replaced. There are two options: replacement cost and actual cash value.

If you opt for actual cash value, which is usually the cheaper of the two options, the insurance company will pay a total of what the item is worth if it were to be sold at market value. In other words you will be limited to what its worth now – not what you paid for it or what current models cost.

Replacement cost, however, does provide coverage equivalent to what it would cost to buy a new item to replace the stolen or damaged one.

Depreciation of Items

Depreciation plays a significant factor in how much an item will be covered for. This is particularly true for an actual cash value policy. The item can go down in value over the life of the policy from the time its made to the time a claim is filed.

That means the amount you’ll be given for an item is based on the value at the time of the claim. Depreciation is also a factor when insurance companies determine maximum limits for individual items and categories (see below).

Coverage Can Fall Into Categories

Say you have $25,000 for total property coverage. That may seem adequate, but that $25,000 isn’t all encompassing. Sometimes the insurance company will group certain items into categories such as “jewelry” or “computers” and there will be limits for each category as well as individual limits for items in a category.

Typically the coverage limit for a category is far less than the total coverage amount on the policy. Another thing to keep in mind it that if you have multiple items in a category that all need to be replaced at once the category limit could affect the actual coverage for each one. For example, say you have 5 computers that have individual limits of $500 but the category limit is $2000. If they all need to be replaced at once the limit is $400 per item.

Below is a sampling of categories and higher priced items that tend of come with limits:

• Computers/Electronics
• Firearms
• Money
• Jewelry
• Furs
• Watercraft
• Furnishings
• Business property

Expensive items can vary greatly in price. Insurance companies have formulas to determine average replacement cost, which are used to determine limits for high-ticket items. These limits help them project how feasible it is to provide coverage for a certain premium amount.

How to Get Additional Coverage

If you have an expensive item that isn’t quite covered by a renters insurance policy there are ways to get additional coverage.

Scheduled Personal Property Endorsement – This is an additional agreement that enables you to purchase more coverage for a specific item. Usually it provides “all risk” coverage, which means it’s covered in all situations.

Optional Coverage – This is additional coverage than can increase the total limit for a category of items. It can also provide coverage for unique items that aren’t on the regular policy.

Insurance Rider – A rider is a backup to your standard policy, which provides additional coverage. There are numerous types of insurance riders including personal property and replacement cost riders.

Carefully go over all of the personal property coverage limits – total, category and individual – before deciding if a policy provides the right amount of coverage.

Image Source: flickr.com/photos/69564978@N06/8554509026/

Original Source: http://www.mybiginsurance.com/renters-insurance-1/individual-item-limits-determined-renter-insurance-policy

When you’re living in a rental with a roommate sharing is a key part of the arrangement. Sharing chores, sharing space, space utility costs. But what about renters insurance? Should you share a policy or each have your own?

When Just One Roommate is Covered

Let’s assume that you have a renters insurance policy, but your new roommate doesn’t have any coverage. Or the situation could be reversed. In this scenario only the roommate with the policy has liability coverage. If an accident were to happen the uninsured roommate could be sued for damages. In addition, only the insured roommate’s possessions will be covered in the event of a natural disaster, fire or burglary.

It’s safe to say that both roommates need coverage. Having just one policy under one name for the living space doesn’t cover everything that happens within the property.

Sharing Renters Insurance

It is possible for more than one roommate to be on one renters insurance policy, especially if the roommates are related. However, this has to be expressly specified. The agent needs to know to add the other roommate on as “additional named insured”.

Each roommate needs to complete their own inventory of the items they want covered. That way if something isn’t covered it’s on the owner not the policyholder. If an item is shared list it under the person who actually purchased the item.

You’ll have to decide how the policy will be paid for since there will be a single payment. Other considerations include deciding what will happen with the policy if one roommate moves out and who will cover the deductible if it needs to be paid.

Getting Separate Renters Insurance Policies

For the most complete coverage that’s the most straightforward, you may want to each get your own insurance policy. The fact of the matter is, each tenant has their own belongings. Filing a claim could get complicated if both tenants are on the same policy.

For example, say roommate #1 is the policyholder and roommate #2 is an additional insured. There’s a break in and roommate #2 has their $1,000 flat screen TV stolen while roommate #1 has a few less expensive electronics stolen. When it comes time to pay the deductible who should cover it? What if roommate #1 didn’t realize the TV was worth $1,000 and it’s only covered for $800?

It may cost a little more, but having separate policies for each roommate will ensure that no one has to count on the other when it comes to coverage. It will also make things easier if the living situation changes.

Regardless of whether you get one renters insurance policy together or each get your own, the important thing is to make sure you’re both covered.

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Original Source: http://www.mybiginsurance.com/renters-insurance-1/roommates-renters-insurance-one-one

Getting renters insurance is a no brainer. It’s a low-cost way to ensure that your property is covered in the event that you rental is damaged or destroyed, and it can even protect you against liability lawsuits. But what isn’t as cut and dry is deciding how much you need to insure.

A lot of people get stuck while trying to decide how much property value they should cover on their renters insurance policy. Let’s take a look at how property value amounts affect an insurance policy and how to go about selecting the right amount of coverage.

Replacement Cost vs. Cash Value

Before calculating what your property is worth you should understand how items are covered under renters insurance in Austin. You can get one of two options:

Replacement cost coverage – You will receive compensation based on what it will cost to replace the property with new comparable items.

Cash value coverage – You will receive compensation based on what your property was worth at the time that it was damaged, destroyed or stolen.

Replacement cost coverage typically comes at a higher premium rate because you won’t be left having to foot part of the bill for new items, which may be the case with the cash value coverage. To illustrate, say you have a laptop that you bought new for $650 three years ago. Today, that laptop’s actual cash value is only $400. However, if you needed to replace it with a new laptop it would cost $675.

With replacement cost coverage you would only have to pay the deductible to receive compensation and get the new laptop, whereas with cash value you’d be paying the deductible and $275 out of pocket since you’d only receive $400 from your insurance company. This is something to keep in mind when you’re deciding the property value amount you need covered.

Calculating Your Property Value

Another determining factor in the cost of your renters insurance is, of course, the amount of property you are insuring. Usually policies are for a specific amount, which is the maximum limit.

To determine how much you own take a detailed inventory.

• Start with the big-ticket items.
• Go room-by-room itemizing everything.
• Don’t forget the garage – there are usually a number of expensive items in there.
• Get professional appraisals when necessary.
• Take pictures of items.
• Save receipts for items.
• Make a note of serial numbers.
• Estimate both the actual cost and the replacement cost.

Make the inventory as detailed as possible. Renters insurance is very comprehensive, covering just about everything in your home.

A Word About Renters Insurance Policy Limits

Do you have any high value items like an engagement ring, piece of artwork or expensive computer setup? If so, you may want to look into adding a rider to your renters insurance policy. A rider is complete coverage for a particular item and is used to circumvent the issue of maxing out the policy limit on an individual piece of property.

Will Low-balling the Value Really Save You?

Selecting a policy with a lower personal property coverage may save you a little up front. However, if you need to actually use the insurance then what you end up paying out of pocket to make up the difference may far exceed what you saved in monthly premiums.

It’s always best to be as accurate as possible with your property value. The point of insurance is to make sure you aren’t financially strapped should something happen. When you low ball the value you are essentially under insuring yourself.

Original Source: http://www.mybiginsurance.com/renters-insurance-1/how-to-decide-how-much-to-insure-with-renters-insurance

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You’ve found a great rental in a really good area of Austin, and all that’s left to do is sign the lease. As you’re reading through it you notice something that you haven’t seen on previous leases. It’s a requirement that you get renters insurance.

One of the first things you may ask yourself is ‘can the landlord make me pay for renters insurance in Texas?’

First, a Little About Renters Insurance

Whether or not a landlord wants you to get renters insurance, it’s definitely a good idea. This is especially true if you live in an apartment or condo complex where walls are shared with other units.

Renters insurance provides protection against property loss in the event of a fire, burglary, etc. You may not think you have a lot of valuables, but do a quick inventory around your home. You may be surprised at how expensive it would be to replace everything on your own. At around $100 a year renters insurance is a very good investment to make.

In a Word – Yes, Landlords Can Mandate That a Tenant Get Renters Insurance

It’s a simple matter of what is laid out in the contract. If you signed a lease that stated the tenant must get renters insurance then that’s that – a contractual agreement was made. The landlord may even specify a minimum amount of coverage for liability and personal property.

For the landlord it’s a matter of liability. They want to ensure that if a tenant causes property damage or bodily injury to someone while in the rental that the tenant is covered. If not, it can become the landlord’s responsibility.

Why Is Renters Insurance Needed if the Landlord Has Insurance?

The next question you may ask is ‘why do I need insurance if the landlord already has it?’ Insurance that the landlord has is a type of property insurance that usually covers the structure of the building, not the contents inside. If there were to be a fire, for instance, then the landlord would recoup the cost of the structure, but all your contents in the home would simply be lost.

The landlord’s insurance also covers liability differently or may not include liability insurance at all. Typically, if liability insurance is included it’s usually for claims made in relation to the property itself. However, if bodily or property damage were to occur because of the tenant’s negligence the landlord insurance will likely not cover the costs involved.

If you are on a month-to-month lease and your landlord requests you get renters insurance you should have up to 30 days to fulfill the requirement. Even if you haven’t been required to get renters insurance it’s worth looking into so that you know you and your belongings are covered.

Original Source: http://www.mybiginsurance.com/renters-insurance-1/can-landlords-make-renters-insurance-mandatory