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Home Insurance

• The 17 Perils
• Actual Cash Value vs. Replacement Cost
• Understanding Deductibles
• Documentation of Valuables
• Expanding Coverage
• Floaters for the Finer Things
• Flood Insurance
• Insuring a Home
• Liability Coverage
• The Basics of Homeowners Insurance
• Cover Yourself with an Umbrella Liability Policy
• Insuring a Condominium
• Special Circumstances: Property Under Construction and Rental Property
• Renters Insurance
Auto Insurance

• On the Move: Insurance Protection for Your Automobile and Other Vehicles
• Auto Insurance Basics: Liability, Collision, Comprehensive
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• Who's At Fault?
• Premiums and Discounts: Factors that Affect Your Rate
• What To Do After an Accident
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Risk Management

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Renters Insurance

If you rent an apartment or a house, the building owner is responsible for any perils that befall the property. Rest assured, if the place burns down, your landlords insurance is responsible to compensate him for damage to the structure.

But if your personal belongings - your furniture, your stereo, your clothing - are destroyed, its you who loses - unless you have renter's insurance.

Renter's insurance is a kind of homeowner's policy for non-homeowners. It contains most of the same provisions of a basic homeowner's policy, except the part that covers the home itself. Up to certain limits, a renter's policy covers your personal belongings against destruction or theft, and protects you against claims of liability if you cause injury to someone or their property.

Depending on which state you live in, your compensation will be figured in one of two ways. The most common method is actual cash value, which is the original value minus any depreciation. You may also be compensated for an items replacement value, which means you will receive enough to replace the item with a comparable model at todays prices. Actual cash value is standard in some states, and you may be able to pay more for replacement value coverage if it is not standard in your state. There are limits to this kind of coverage. Most categories of loss are capped at a certain amount or a percentage of the policy. If you own expensive items, you may need to purchase additional coverage if you want to be fully compensated for a loss.

A renter's policy will also cover your temporary living expenses while repairs are being made if your rented home is damaged. There are limits to this coverage, as well, usually 30 to 40 percent of the total value of the policy.

A renter's policy, usually called HO-4, will cover you against losses due to the same perils that are covered by regular homeowner's insurance. They include fire or lightning, windstorm or hail, explosion, riot or civil commotion, aircraft, vehicles, smoke, vandalism or malicious mischief, theft, damage by glass, volcanic eruption, falling objects, weight of ice, snow, or sleet, water-related damage from home utilities, and electrical surge damage.

And, just like regular homeowner's insurance, earthquakes and floods are not covered. Insuring against these kinds of catastrophes will require a rider to your renter's policy, or a separate policy.

A waterbed liability provision is standard in most renter's polices. So if your bed springs a leak and floods your downstairs neighbors apartment, youre covered.

Your premiums will vary according to a number of factors, such as where you live, your age, and if you want to add any riders or endorsements. The deductible you choose can also affect to cost of the policy. A deductible is the first portion of a loss that you, the insured, must assume. The higher your deductible, the lower your premium. If your \$1,000 stereo is destroyed, and you have a \$500 deductible, then the insurance company will pay you the amount above your deductible, which is \$500. If you have a \$1,000 deductible, you wont be able to make a claim.

A renter's policy can go a long way toward protecting you financially if you suffer misfortune. Best of all, you dont have to own your home to qualify for protection.

© 2003 Emerald Publications

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