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Home Renters Insurance Explained

Renters insurance is an option for anyone who rents a house, or an apartment, and needs insurance to cover the contents of their home. Typically, standard home insurance is made up of building and contents insurance and if you go for one of those policies you may be paying over the odds with your premiums. As a renter you will not need to insure the home structurally or cover acts that will cause damage to the interior or exterior of the house. The owner of the property has that obligation. Essentially this type of policy is a contents insurance policy without the house.

You may want your personal effects insured in case there is a problem. The owner of the house will have insured the building but your possessions will not be covered by their plan. You will need to take out a separate plan and that is where renters insurance comes in.

Who is a potential candidate?

The building should be be insured and that is covered by the owner or landlord . There is no legal requirement by them to cover the contents of the property. Renters insurance is simply an option to protect your personal belongings as you may have no legal recourse if you are not covered.

What typically does it cover?

Renters insurance typically covers a number of standard issues like theft, vandalism and fire. In addition to this if an accident occurs in a home you are rented you are also covered in case of a liability suit against you. In case of a claim, some insurers have 'new for old' arrangements which see your insured goods replaced with new items. Other insurers with lower premiums often replace goods with others of a similar standard.

What typically does it not cover?

Acts of God such as flooding and earthquake damage is typically not covered with renters insurance. You can opt for cover in these areas as an extra but can significantly increase your premiums.

Additional coverage that policy holders might take out in this area

Renters insurance will only cover certain personal effects in the home and major items such as vehicles are excluded. As an example, if you have a motorcycle that you have stored in your garage, you will need motorcycle insurance to cover that particular item. However, your policy will cover peripheral items such as helmets, toolboxes, wheel immobilizes or any kind of alarm.

Contents policies for homeowners typically includes coverage of your belongings if you are away from home or in transit. Renters coverage doesn't usually include this as standard but it is often found as an extra. You may also need to apply for extra coverage if you have single items above a certain amount. For instance, bicycles, computers and easily transportable items of high cost normally have to be listed separately.

What will it cost?

This product can be very cheap with cover as low as $12-20 per week. If you were to opt for standard home policy you could find yourself paying over twice that much. Plans and cost vary between insurers but as a rule the main indicators for price are the amount of cover you need, the post code you live in and the security features of the property.

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