TUESDAY, DECEMBER 20, 2011
Renters Insurance Definition
Renters insurance is a form of insurance that offers people who lease a residence for the purpose of living protection for their own personal property and for the damage that their negligence causes to others who are not part of the household. From this definitions we can conclude the following points about renters insurance.
1. The coverage is designed for people who lease/ rent the residence, and not own it. If people own the residence then they qualify for different type of insurance (homeowners insurance or condominium insurance.)
2. Renter insurance offers protection for personal property of the renting tenants. Personal property includes personal belongings such as TVs, personal computers, cameras, clothes, refrigerators, etc. There are additional coverages up to certain limits. Renters insurance also covers increased living expenses up to a certain limit, indirect loss resulting from the loss of property.
3. Personal liability covers the renter persons from lawsuits brought against them because of their negligence actions in connection with them using the residence for personal use. For example, if the renter person's dog attacks and bites the neighbor because of the negligence of the renter person, then the personal liability will kick in. Medical payment to others, also known as guest insurance, is a limited coverage (ie $1,000) that will pay for the injured guests without needing to prove liability of the renter.
Importance of Renters Insurance
Replacing personal property in the event of a loss like fire can be costly. Replacing the personal property for an average family of three may exceed $20,000. Also, extra living expense can be large amounts until repair of the rented residence is complete. While lawsuits are not frequent happening they can cause extreme distress and waste of lots of financial resources when they occur.
Many landlord insist on their tenants having renters insurance coverage as part of the lease agreement, with landlords being listed as additional insured. Landlords want to make sure that there is liability coverage in the event of lawsuits brought against them in connection with the use of the residence.
Renters Insurance Rates
Renters insurance is normally an inexpensive coverage. Major factors affecting rates include the following factors.
Credit of Applicant. The most important factor is the credit of the applicant. Many companies will even make it very hard to extend coverage for people with very negative credit such as bankruptcy.
Physical Location: Factors such as the ZIP code, residence age, construction type of residence, security system used, etc. are all important factors in the determination of the renters insurance rates.
Type and Amount of Coverage: Type of coverage, amount (limits) of coverage, as well as any additional rides (scheduled personal property, replacement cost on personal property, etc.) are factors that affect the amount of premiums paid for renters insurance.