By: Luke Jones, Published on January 31, 2018 08:49 PM, Last Update on January 31, 2018 05:51 PM
Statistics show people who rent an apartment or home are more likely to be victims of theft. However, many people do not bother with tenants insurance. A common misconception is home insurance will protect the rental owner, and there is no point insuring contents.
Most people sight the cost of tenant insurance for the reason they do not purchase coverage. Another reason is that many tenants do not realize there is a dedicated coverage policy for them, or that their property is not worth insuring.
These are major misconceptions because renter’s insurance is not expensive, and is certainly worth paying for. Most tenants insurance is very affordable, and could cost less than $20 per month, depending on the policy. Insurance can cover again loss of a place to live, fire damage, lightning damage, weather causes, smoke damage, and burglary.
Many tenants also undervalue their property. For example, the value of existing property is not necessarily the problem, but the cost of replacing them is. Think how much it would cost you to replace your multiple TVs, stereo, computers, tablets, phones, kitchen appliances, furniture, and clothes if they were lost in a fire.
Tenants insurance comes in two basic policies, replacement cost and actual cash value (ACV). The latter will only compensate customers for the value of property at the time it was damaged or stolen. For example, if you bought your TV for $1000 two years ago and it is worth $500 at the time of loss, the insurer will pay the $500 value.
Replacement cost covers how much it would cost to replace the item entirely. So, looking at the TV example again, the insurer would pay the $1000 to get a replacement model.