A renters insurance policy is specifically designed for a person who occupies a home or dwelling and does not own the premises. Typically that person is called a renter, since they pay rent to the owner of the property. Renters insurance works like any insurance policy. You pick the coverage you want, and you pay a premium to the insurance company based upon the coverage and the policy limits.
One of the main parts of the policy is coverage for household goods. That would include anything the renter owns that is keep on the premises. Furniture, clothing, jewelry, and kitchen items are just a few of the household goods that are covered. You are insured against loss due to fire, theft, or loss due to about any other cause. The renter picks the total amount of coverage based upon the items and their value. A renter will want to get replacement cost. Some items may cost more at the time of loss than they cost when purchased. If you do not have replacement cost, then you will have to factor in depreciation. That will leave the renter with not enough money to replace the item stolen or damaged by fire.
Another part of the policy is liability. This protects the owner against a lawsuit by someone coming on the property and being injured by the alleged negligence of the renter. This is very important. The insurance pays for the company to handle the claim, and also pays for all legal expenses in defending any claim in court.
One final coverage is reimbursement for living expenses if the premises is uninhabitable. The home or apartment catches on fire. The renter has to move out for a period of time while repairs are made. This clause will provide money to pay for living expenses until the renter can move back in. The average person make not think about this problem, but the expense could be quite large depending on how long the renter is out of the home.
The major benefit of this type of insurance is peace of mind knowing that your property, liability, and out of pocket expenses are covered by insurance.
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