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Business // Thinking Smart
David S. Chang

Reasons To Get Renter’s Insurance

One of the most overlooked types of insurance is renter’s insurance. If you are currently renting the place you live in, losing everything to fire, flood, burglary or even a lawsuit can be devastating. Renter’s insurance covers your possessions against these potential problems.

Here are some reasons why you should get renter’s insurance and key features to look for:

The average renter has approximately $20,000 in possessions. Over time we begin to accumulate items, and having to start over again can be very costly. Imagine the cost of replacing your clothing, TV, computer, furniture, smartphone and other personal items. Many people may think that their landlord’s insurance may cover their personal belongings.

Unfortunately, it only covers the structure you are renting and not your possessions. Also, being a victim of a natural disaster or threat is a lot more common than people think. According to the National Fire Protection Association, “more than 90,000 apartment fires were reported to local fire departments in 2010, causing more than $1 billion in damage.”

On top of that, according to the U.S. Department of Justice’s Bureau of Justice Statistics, people who rent are more likely to be bur-glarized than homeowners.

In addition to covering your possessions, renter’s insurance also can cover liability and medical expenses. If guests are injured where you live, a good renter’s policy will reimburse them for medical expenses. It also will cover liability issues such as legal bills and damages if you are found liable. How much will all of this cost? Surprisingly, it can be as low as $12. It will depend on the coverage and benefits you get.

Here are some benefits you should look for in a renter’s policy: Make sure the replacement-cost coverage will provide enough money to buy new items. This is better than one that only covers the actual value of the items you lost. Let’s say someone stole your 3-year-old laptop. The actual value will be only what it is worth at the time of the loss, but replacement cov erage will cover the price of a brand-new laptop. You also will want a policy that covers any type of severe weather event such as earthquakes, hurricanes and other natural disasters. Also a good coverage will replace items stolen from your car, and reimburse living expenses if you are temporarily forced to move because of damage to the home you are renting.

Lastly, make sure the company you get the renter’s insurance from is solid with a good track record. You can check its financial ratings and customer-service ratings.

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