My Insurance Insider and Finance Blog

Image via WikipediaAn obvious question may come up to your mind as why you should buy an renters insurance policy or may think that your landlord(or landlady) is all responsible in getting an insurance coverage for his own interest.

You may neglect or procrastinate to have a right kind of insurance policy for the financial loss of your valuable house-hold possessions that you can suffer anytime.But in any case, you have to admit that your landlord and/or landlady will never be going to insure your house-hold contents/items(rightly, it would go against the principles of insurance and insurable interest too) and nobody will get a claim in the end.

Instead your landlord is more interested to protect his home buildings (including the rented ones) and his legally possessed home contents.You might be thinking, its a costly matter to have renters insurance covers.But for your kind information, it is truly much more cheaper than you think of.Before you purchase a renters policy,you need to confirm-

1.What sorts of covers,are you getting?

2.Is there any discount available?

3.What are the exclusions there in the policy?

In U.S.A., a Standard Renters Policy(HO-4), covering all 16 disasters, opts in two types of loss payment methods.

1.Actual Cash Value that pays you the depreciated cost of contents, up to a certain limit as stated in the policy and

2.Replacement Cost that pays you the actual cost of replacing your damaged belongings or contents, up to a certain limit and that too without any deduction for depreciation.

So, you have choices, according to your budget, as which one to consider.In later case, you’ll get full amount of loss, but you have to pay higher premium. And if your valuables, such as jewelry, musical system, gadgets, furs etc. are more precious ones that exceeds the standard policy limits, then you may have to take an additional Floater endorsement to cover the precious contents sufficiently.

Like standard homeowners insurance, standard renters policy covers fire, lightning, vandalism/malicious damages, burglary, explosion,windstorm,water damages(generally excludes flood which can be obtained from Federal Flood Insurance Program (contact point:888-379-9531 and http://floodsmart.gov).

Renters insurance also do not cover damages caused by leaking of water pipes, ground water seepage, mould formation(resulting from poor maintenance of building or normal wear & tear). But the damages caused by snow or ice, sudden & accidental flow of water from natural source, rain water, storm, freezing of plumbing pipes are normally cover.

I n India, there’s a package policy, popularly known as House-holder insurance (composite) that consists of many sections covering contents(Sect-IB) that automatically covers flood & inundation, earthquake etc. Content insurance in U.K., New Zealand, Australia covers storm, flood, earthquake,Tsunami(Australia).

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To your peaceful life

Kaushik