Renter or Content Insurance – Why to Choose?
An obvious question may come up to your mind as why you should buy an renters insurance policy or may think that your landlord (or landlady) is all responsible for getting an insurance coverage for his own interest.
You may neglect or procrastinate to get a right kind of insurance policy for the financial loss of your valuable household holdings that you may suffer anytime. But in any case, you have to admit that your landlord and / or landlady will never be going to insure your house-hold contents / items (rightly, it would go against the principles of insurance & insurable interest) and nobody will get a claim in the end.
Instead your landlord is more interested to protect his home buildings (including the rented ones) and his legally owned home contents. You might be thinking, its a costly matter to have renter's insurance cover.But for your kind information, it is really much more cheaper than you think of. Before you purchase a renter's policy, you need to confirm as to:
1. What types of covers are you getting?
2. Is there any discount available?
3. What are the exclusions there in the policy?
In USA, a Standard Renter's Policy (HO-4), covering all 16 disadvantages, opts in two types of loss payment methods.
1. Actual Cash Value that pays you the depreciated cost of content, up to a certain limit as stated in the policy and
2. Replacement Cost that pays you the actual cost of replacing your damaged contents, up to a certain limit and without any deduction for depreciation.
So, you have the choices, according to your budget, which which one to consider.In later case, you'll get full amount of loss, but you have to pay higher premium. And if your valuables, such as jewelry, musical system, gadgets, furs etc. are more precious ones that exceed the standard policy limits, then you may need to take an additional Floater endorsement to cover the precious contents adequately.
Like standard homeowners insurance, standard renter's policy covers fire, lightning, vandalism / malicious damages, burglary, explosion, windstorm, water damages (generally excluding flood which can be obtained from Federal Flood Insurance Program and the contact point is: 888-379-9531 and http://floodsmart.gov ).
Renter's insurance also does not cover damages caused by leaking of water pipes, ground water seepage, mold formation (resulting from poor maintenance of building or normal wear & tear). But the damages caused by snow or ice, sudden & incidental flow of water from natural source, rain water, storm, freezing of plumbing pipes are normally cover.
I n India, there's a package policy, popularly known as House-holder insurance (composite) that consist of many sections covering contents (Sect-IB) that automatically covers flood & inundation, earthquake etc. Content insurance in UK, New Zealand, Australia covers storm, flood, earthquake, Tsunami (Australia).