By Richard Farrell
Special to Relocation.com
Renters must protect their own belongings should anything happen to their belongings. Often times, landlords have an insurance policy that only protects damages to the property and not the personal items of renters. Here’s what to do.
Standard Renters Policies:
A good residential insurance policy should covers losses to personal property under the following scenarios:
- Weather-related damages such as fire, lightning, windstorm or hail.
- Explosions, smoke, riot and civil commotion.
- Damage caused by vehicles and/or aircraft, and objects falling.
- Theft, vandalism or damage by malicious persons.
- Damage caused by specified events beyond the renter’s control, including burst water pipes, sudden freezing, fire, etc.
Earthquake and flood damage are not normally standard cover. A separate policy or a rider to cover damage caused by these disasters is available – the renter will pay more if they live in an area prone to either. The same applies to a renter living in a hurricane zone.
Actual Cash Value versus Replacement Cost Coverage:
All valuable items must be listed on an annexure to a renters policy. Actual cash value cover, as the name implies will pay only the value that the asset was worth at the time of the claim, less deductible excess. The policyholder may be left significantly short, as it will still cost full price to buy a new replacement item. The replacement cost coverage option ensures complete cover for the full cost of replacement, less the deductible excess again.
A Detailed Inventory is Vital:
Items not on an inventory may not be covered. A renter should draw up a detailed list of all belongings room-by-room, providing a detailed description, serial number, estimated replacement cost and condition of every item. A video is a useful backup - also retain proofs of recent purchases, as this will support a claim as well.
If a rented dwelling becomes uninhabitable due to flooding, fire, burst pipes or any other cause specified in a renters insurance policy, then this will cover additional living expenses caused by relocating temporarily. Some cheap insurance options may not include this.
Liability protection is usually standard with any renters insurance policy. This covers the renter up to a specified amount for claims arising from an accident to a third party at the rented property.
Renters should always shop around - premiums are based on risk factors and can be influenced by where renters live, the level of cover they are seeking and the deductible excesses. Defined excesses can be used to bring premiums down – but risk increases too. Insurers can also access a renters claims history and this can affect insurance rates.. This is why small insurance claims are unwise. Age is another factor – a renter should not be ashamed to ask about pensioner’s discount. The key factor in all of this is to balance affordability against risk, and check an insurance plan carefully before accepting and signing.