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Renter’s Insurance

Posted August 08, 2012 in Advice Column, Norwalk

With college ready to start, parents are wondering about renter’s insurance for the children going away to school. Renter’s insurance protects property against damage or loss, and insures you in case someone is injured while on your property.

Why should I buy it?
Your landlord’s insurance does not cover your personal property — your clothes, furniture, stereo, computer, bicycle or anything else. Renter’s insurance does. Renter’s insurance also may pay for accidents that occur on your property or damage to others’ property. If your child is living in the dorms at school, 10 percent of your home policy contents coverage will extend to cover his or her items. If you have, for instance, $90,000 of contents coverage on your home policy, you would have $9,000 of coverage away from your premises.

What is covered?
You can purchase different levels of coverage, but there may be limits on the values of specific items covered. For example, some policies limit the amount they will pay for computers, jewelry and other specific items. You may purchase additional coverage for items not covered in your basic policy.

How much insurance do I need?
Estimate the value of your personal possessions. This is the amount of insurance you need to replace the contents of your home if everything is destroyed. With the coverage being so inexpensive, you do not want to come up short, so the more coverage you buy, the less you will have to pay out of your own pocket to replace property that is destroyed or stolen.

What is the difference between actual cash value and replacement value?
You can insure your property in either of two ways — the actual cash value, or the replacement value.

Actual cash value
This coverage considers the age and condition of the item at the time of the damage or loss, and pays only what it is worth to replace it with and items of similar condition used. We do not consider this the better of the two options.

Replacement value
This pays you the cost to replace the covered item with a comparable new item. Replacement value policies are the preferable coverage to have. The cost is a very minor increase or included automatically under some policies.

As we’ve seen lately with some big apartment fires, even if you personally do not cause the loss, you could be affected by some else’s actions. A tenant one or two units away may begin cooking, leave the food on the stove and go to the store. The food catches fire, and the next thing you are looking through ashes for your belongings. By having the renter’s insurance you could collect if you are displaced from your apartment because of a fire in another part of the building. Renter’s insurance pays for any additional living expenses such as food and lodging, until you are able to get back into your home.

Call your agent about renter’s insurance to bundle with your auto insurance. By the time you add in the auto/contents discount, the rate can be just a few dollars per month to add the important coverage.

Information provided by Mike Lane, Lane Insurance Agency, Inc., 1225 Sunset Drive, (800) 244-4608.

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