The basics of renters insurance
Renters face the same risk as homeowners in cases of disasters striking their dwelling. Your landlord or condo association may have insurance, but this only protects the building, not your things in it. Renters insurance can protect your belongings in case of disaster.
What standard policies cover
There are several types of residential insurance policies. The HO-4 policy is designed for renters, while the HO-6 policy is for condo owners. Both HO-4 and HO-6 cover losses to your personal property from 16 types of perils:
Fire or lightning
Windstorm or hail
Explosion
Riot or civil commotion
Damage caused by aircraft
Damage caused by vehicles
Smoke
Vandalism or malicious mischief
Theft
Volcanic eruption
Falling objects
Weight of ice, snow, or sleet
Accidental discharge or overflow of water or steam from within a plumbing, heating, air conditioning, or automatic fire-protective sprinkler system, or from a household appliance
Sudden and accidental tearing apart, cracking, burning, or bulging of a steam or hot water heating system, an air conditioning or automatic fire-protective system
Freezing of a plumbing, heating, air conditioning or automatic, fire-protective sprinkler system, or of a household appliance
Sudden and accidental damage from artificially generated electrical current (does not include loss to a tube, transistor or similar electronic component)
Floods and earthquakes aren't on the list. If you live in an area prone to either, you'll need to buy a separate policy or a rider. In some coastal regions, where hurricanes might pose a threat, you might also need to buy a separate rider to cover wind damage.
Actual cash value vs. replacement cost
Make sure you let your agent know about any particularly valuable items you have.
One thing to look at is whether the insurance company will offer "actual cash value" (ACV) or "replacement cost coverage" for your belongings. As the name implies, ACV coverage will pay only for what your property was worth at the time it was damaged or stolen. So, if you bought a television five years ago for $500, it would be worth significantly less today. While you'd still need to spend about $500 for a new TV, your insurance company will pay only for what the old one was worth, minus your deductible.
Replacement cost coverage, on the other hand, will pay what it actually costs to replace the items you lost, again minus the deductible. In some regions, most insurers write ACV coverage. In others, they'll quote you replacement cost coverage by default. Replacement cost coverage will cost you more in premiums, but it will also pay out more if you ever need to file a claim. Let your agent know about any particularly valuable items you have. Jewelry, antiques and electronics might be covered only up to an amount that won't pay for their replacement.
If you have some items that are unusually expensive, such as a diamond ring, you'll probably want to purchase a separate rider. Without riders for expensive items you can't recover the full loss if it's beyond your policy limit.
Take inventory
Value of a typical single-person household
Furniture: $8,000
TV, VCR, stereo, tapes and CDs: $2,000
Home computer: $1,500
Microwave: $120
Other appliances: $240
Clothing: $3,000
Paintings, prints, photos: $800
Glassware, china, and silverware: $600
Sports equipment: $600
Cameras and photographer's equipment: $800
Books: $700
Jewelry: $1,000
Other property: $4,000
Total: $23,360
To ensure you are compensated for any belongings you lose from a fire, storm or other catastrophe, you should inventory all of your personal belongings. Your inventory should list each item, its value, and serial number. Photograph or videotape each room, including closets, open drawers, storage buildings, and your garage. Keep receipts for major items in a fireproof place. To make things easier, the Insurance Information Institute (III)has free inventory software that helps you create a room-by-room inventory of your personal possessions. For more information, go to KnowYourStuff.org.
When your home is unlivable
If your apartment or condominium becomes uninhabitable due to a fire, burst pipes or any other reason covered by your policy, your renters insurance will cover your "additional living expenses." Generally, that means paying for you to live somewhere else.
Additional benefits
Liability protection is also standard with most renters and condo policies. This means if someone in your unit slips and falls, you're covered for any costs, up to your liability limit. If this person sues you, you're covered for what they win in a court judgment as well as legal expenses, up to your policy's limit.
Keeping your premium low
Just like any other type of homeowners insurance policy, your renters insurance premium depends on a number of factors: where you live, your deductible, your insurance company and whether you need any additional coverage.
There are ways to reduce your renters or condo owners insurance bill. Increasing your deductible (the amount you pay before your coverage kicks in) is one strategy. Make sure you can afford whatever deductible you choose. If you're thinking about getting a dog, you might want to think twice. Some insurance companies are reluctant to write policies for owners of certain breeds.
Most insurers offer a discount for "protective devices" including smoke and fire detectors, burglar alarms and fire extinguishers.
Some insurers might offer discounts to policyholders if you buy both an auto and renters policy (called a multi-line discount).
Saturday, February 20, 2010
Wednesday, October 14, 2009
Lease and Loan Gap Coverage
If you are thinking about leasing or buying a car, you might consider adding Lease Loan Gap (LLG) Coverage to your auto policy. LLG Coverage is an extension of your auto's physical damage coverage. Ordinarily, your comprehensive and collision coverages provide you with up to the actual cash value (the vehicle's cost minus depreciation) in the event of a total loss. When you sign a lease or loan agreement, you may be obligating yourself for an amount higher than the vehicle's actual cash value. At a cost of approximately 5% of your current comprehensive and collision premiums, LLG Coverage protects you from out-of-pocket expense when such a "gap" occurs. Although there are some limitations, LLG Coverage will pay up to your lease or loan amount if your car is stolen or if the cost of repairs is greater than its salvage value. Contact me and I will be happy to discuss this coverage further. Note: Some car manufacturers may provide gap coverage as part of the lease agreement --- check your particular contract for details.
Brian Wyatt
213-8864
Brian Wyatt
213-8864
Sunday, September 20, 2009
Your Home Insurance Rate
Your Home Insurance Rate
Everybody hates paying insurance premiums, mostly because people feel insurance costs are too high and they aren't really getting anything in return. That is, until they have a theft, fire or other insurance issue. Then suddenly those premiums they've been paying can seem like the best investment ever made.
Still, we all want to get the best deal possible on our home insurance policy. And there is, in fact, a lot you can do to lower your premiums. Insurance companies determine your rates based on how much risk they believe you present. If they see you as likely to make claims more often, then your premiums will be higher than if they view you as a lower risk client.
Major Factors that Affect Home Insurance Rates:
There are three major factors that affect home insurance rates: location, number and type of claims and credit rating. The degree in which you can control one or more of those factors will play a role in how much you can lower your own home insurance rates.
LocationAlthough homeowners insurance rates are on the rise nationwide, people living in coastal areas, areas prone to natural disasters and wildfires (think California), and areas with high crime rates are paying even higher rates. While there is little you can do to control external environmental factors if you live in one a high-risk area, living close to a fire or police station can help lower your premiums.
Number and type of claims - Many people fear that filing home insurance claims can cause them to be “blackballed” by insurance companies, resulting in higher premiums, loss of coverage and difficulties obtaining new insurance. While there is some truth to that notion, it often has more to do with the type of claims filed rather than the number (although filing too many claims in a specified time period can boost rates—but more about that later).
Believe it or not, home insurance claims related to weather or catastrophes do not necessarily result in a boost to your premiums. In fact, according to CLUE (which stands for Claim Loss Underwriting Exchange operated by Georgia-based ChoicePoint and is considered the industry standard for insurance claim reports) the three most common insurance claims that are more likely to trigger an increase in premiums include:
Dog Bites
Water Damage
Slip and Fall Claims
Dog Bites – Sorry, Rover, but dog bites are the largest single cause of home policy claims.Many insurance companies keep a list of dog breeds most likely to attack, based on Centers for Disease Control and Prevention statistics. If the homeowner owns that particular breed, it may be difficult to even obtain insurance.
A single attack is often likely to result in higher premiums. However, homeowners may be able to keep their insurance rates from escalating by remedying the situation to the insurance company's satisfaction.
This may involve getting rid of the dog, or taking the dog to a "psychologist" or animal trainer. Sometimes, the homeowner's rates will then depend upon passing a probationary period, such as six months without an attack.
Water Damage – Water damage tends to set up a barrage of red flags for insurance companies, largely because of the costs of eliminating mold. The biggest controversy over CLUE reports has been over water damage and its effect on real estate sales.
Homebuyers cannot obtain CLUE reports on homes they are considering purchasing. However, the homebuyer's insurance company can obtain the report in deciding whether to insure the home.
Plumbing problems that cause damage inside a property also can be red flags to insurance companies, particularly if the repairs -- or lack thereof -- result in another, similar claim. In that case, you might be better off solving the water damage issues yourself, especially if the damage is minor and involves broken pipes or leaks in window wells, walls and seams.
Slip-and-Fall Claims – A slip-and-fall injury is a generic term used to describe an injury that happens when someone trips, slips or falls as a result of a hazardous or dangerous condition on someone's property. Slip-and-fall injuries, according to the National Safety Council, are the single largest cause of emergency room visits. If someone hurts themselves on your property and files a claim with their insurance company, your rates may rise.
So, when should you file a claim?
Typically, there are no general guidelines for filing a claim. Filing a single claim for homeowners insurance generally will not result in higher rates. However, making two or more claims in a three-year period is more likely to trigger a hike, although each company is different. Many companies base their decisions on how long you've been with the company and the nature of the claims.
A general rule of thumb is to avoid filing small or petty claims. And avoid filing a claim for maintenance-related damages such as a chronic water leak if at all possible – even one such claim could cause your insurance rates to rise or even be dropped by your insurer. It’s best to keep your home in good shape, making repairs and replacing major components as needed to avoid big expenses as well as minor home insurance claims.
Credit Rating- As you might imagine, having a good credit history can help lower your insurance rates – particularly when you are first shopping for an insurance company. Insurance companies see a good credit history as both a sign of responsibility and stability (staying with one bank or credit company), and they are more likely to offer discounts based on that.
In the end, homeowners insurance is there to give you peace of mind and to restore damaged property. But understanding when to make a claim as well as how to control aspects of insurance costs can save you both headaches and money in the long run.
Learn how easy and convenient shopping for home insurance can be.
Call me to get your free home insurance quote today!
Brian Wyatt
213-8864
Everybody hates paying insurance premiums, mostly because people feel insurance costs are too high and they aren't really getting anything in return. That is, until they have a theft, fire or other insurance issue. Then suddenly those premiums they've been paying can seem like the best investment ever made.
Still, we all want to get the best deal possible on our home insurance policy. And there is, in fact, a lot you can do to lower your premiums. Insurance companies determine your rates based on how much risk they believe you present. If they see you as likely to make claims more often, then your premiums will be higher than if they view you as a lower risk client.
Major Factors that Affect Home Insurance Rates:
There are three major factors that affect home insurance rates: location, number and type of claims and credit rating. The degree in which you can control one or more of those factors will play a role in how much you can lower your own home insurance rates.
LocationAlthough homeowners insurance rates are on the rise nationwide, people living in coastal areas, areas prone to natural disasters and wildfires (think California), and areas with high crime rates are paying even higher rates. While there is little you can do to control external environmental factors if you live in one a high-risk area, living close to a fire or police station can help lower your premiums.
Number and type of claims - Many people fear that filing home insurance claims can cause them to be “blackballed” by insurance companies, resulting in higher premiums, loss of coverage and difficulties obtaining new insurance. While there is some truth to that notion, it often has more to do with the type of claims filed rather than the number (although filing too many claims in a specified time period can boost rates—but more about that later).
Believe it or not, home insurance claims related to weather or catastrophes do not necessarily result in a boost to your premiums. In fact, according to CLUE (which stands for Claim Loss Underwriting Exchange operated by Georgia-based ChoicePoint and is considered the industry standard for insurance claim reports) the three most common insurance claims that are more likely to trigger an increase in premiums include:
Dog Bites
Water Damage
Slip and Fall Claims
Dog Bites – Sorry, Rover, but dog bites are the largest single cause of home policy claims.Many insurance companies keep a list of dog breeds most likely to attack, based on Centers for Disease Control and Prevention statistics. If the homeowner owns that particular breed, it may be difficult to even obtain insurance.
A single attack is often likely to result in higher premiums. However, homeowners may be able to keep their insurance rates from escalating by remedying the situation to the insurance company's satisfaction.
This may involve getting rid of the dog, or taking the dog to a "psychologist" or animal trainer. Sometimes, the homeowner's rates will then depend upon passing a probationary period, such as six months without an attack.
Water Damage – Water damage tends to set up a barrage of red flags for insurance companies, largely because of the costs of eliminating mold. The biggest controversy over CLUE reports has been over water damage and its effect on real estate sales.
Homebuyers cannot obtain CLUE reports on homes they are considering purchasing. However, the homebuyer's insurance company can obtain the report in deciding whether to insure the home.
Plumbing problems that cause damage inside a property also can be red flags to insurance companies, particularly if the repairs -- or lack thereof -- result in another, similar claim. In that case, you might be better off solving the water damage issues yourself, especially if the damage is minor and involves broken pipes or leaks in window wells, walls and seams.
Slip-and-Fall Claims – A slip-and-fall injury is a generic term used to describe an injury that happens when someone trips, slips or falls as a result of a hazardous or dangerous condition on someone's property. Slip-and-fall injuries, according to the National Safety Council, are the single largest cause of emergency room visits. If someone hurts themselves on your property and files a claim with their insurance company, your rates may rise.
So, when should you file a claim?
Typically, there are no general guidelines for filing a claim. Filing a single claim for homeowners insurance generally will not result in higher rates. However, making two or more claims in a three-year period is more likely to trigger a hike, although each company is different. Many companies base their decisions on how long you've been with the company and the nature of the claims.
A general rule of thumb is to avoid filing small or petty claims. And avoid filing a claim for maintenance-related damages such as a chronic water leak if at all possible – even one such claim could cause your insurance rates to rise or even be dropped by your insurer. It’s best to keep your home in good shape, making repairs and replacing major components as needed to avoid big expenses as well as minor home insurance claims.
Credit Rating- As you might imagine, having a good credit history can help lower your insurance rates – particularly when you are first shopping for an insurance company. Insurance companies see a good credit history as both a sign of responsibility and stability (staying with one bank or credit company), and they are more likely to offer discounts based on that.
In the end, homeowners insurance is there to give you peace of mind and to restore damaged property. But understanding when to make a claim as well as how to control aspects of insurance costs can save you both headaches and money in the long run.
Learn how easy and convenient shopping for home insurance can be.
Call me to get your free home insurance quote today!
Brian Wyatt
213-8864
Tuesday, August 25, 2009
Accident With A Borrowed Car......who pays??
Accident With a Borrowed Car: Whose policy pays?
If you lend your car to a friend and your friend has an accident, it might be your insurance that's on the hook. It all depends on the insurance company that issued your policy. One company's policy may state: "the insurance follows the car" while another company's policy says the driver's insurance is the primary coverage even though you own the vehicle involved. Let's take a look at the two different scenarios:
If the insurance follows the car and you lend your car to a friend, your coverage is considered the primary coverage. If your friend has an accident, it's your insurance that will pay the claim. If the accident is serious enough to use up all of your policy's coverage, then your friend's coverage, which is considered secondary, might also be used.
If the insurance follows the driver, coverage is provided the other way around. If you lend your car to a friend and they have an accident, it's their policy that is considered primary coverage, meaning their insurance company will pay the claim. In this case, your policy would be secondary and wouldn't pay for anything unless your friend's policy limits were used up.
All these rules go out the window in many cases if the person borrowing the car happens to be a relative who resides in the same household as the owner. You should read your policy carefully to see what type of coverage applies to you.
Remember to always exercise caution when it comes to lending your car.
Brian Wyatt
213-8864
If you lend your car to a friend and your friend has an accident, it might be your insurance that's on the hook. It all depends on the insurance company that issued your policy. One company's policy may state: "the insurance follows the car" while another company's policy says the driver's insurance is the primary coverage even though you own the vehicle involved. Let's take a look at the two different scenarios:
If the insurance follows the car and you lend your car to a friend, your coverage is considered the primary coverage. If your friend has an accident, it's your insurance that will pay the claim. If the accident is serious enough to use up all of your policy's coverage, then your friend's coverage, which is considered secondary, might also be used.
If the insurance follows the driver, coverage is provided the other way around. If you lend your car to a friend and they have an accident, it's their policy that is considered primary coverage, meaning their insurance company will pay the claim. In this case, your policy would be secondary and wouldn't pay for anything unless your friend's policy limits were used up.
All these rules go out the window in many cases if the person borrowing the car happens to be a relative who resides in the same household as the owner. You should read your policy carefully to see what type of coverage applies to you.
Remember to always exercise caution when it comes to lending your car.
Brian Wyatt
213-8864
Tuesday, August 4, 2009
6 Deadly Sins...Of Buying Auto Insurance
1. Purchasing Auto Insurance form a "direct writer" or "captive agent".
There is certainly nothing wrong with these types of insurance companies. State Farm, Allstate, and GEICO are three such examples. However, it would be much more prudent from a consumer's perspective to contact an independent insurance agent. Please understand that independent insurance agents represent numerous different insurance companies and can therefore "comparison shop" your rates with these reputable insurance carriers. This is vastly different from a "direct writer" who only represents their own company and thus only has one rate for the coverage plan to offer you. In other words, whatever your driving record or coverage needs are, it is imperative that you allow an experienced insurance professional analyze your situation and shop around for the best available rate. As there are literally thousands of coverage options from hundreds of insurance companies. Utilizing the skills of an independent insurance agent is the best way to determine what type of policy to purchase from which insurer.
2. Applying for Auto Insurance with low deductibles.
I would recommend that once at least carry a $500.00 deductible on their comprehensive and collision coverage's. This way a policyholder will not be turning in relatively small claims to their insurance provider which could negatively impact their rates. Plus, carrying higher deductibles is an excellent way to significantly reduce one's premiums!
3. Not placing your Automobile and Homeowners Insurance Policies with the same agent.
Once again, from a responsible consumer's point of view, it only makes financial sense to place both of your automobile and homeowners policies together to maximize the savings. For instance, a majority of insurance companies offer a 10% to 20% discount on policies when both the home and auto coverage are placed together.
4. Buying an Automobile Insurance Policy with too low of liability limits.
One should never secure an auto policy with just the state minimum limits. In Indiana the state minimum limits are $25,000 per person /$50,000 per accident bodily injury and $10,000 property damage. Using this example, if an irresponsible consumer purchased an auto policy with these extremely low liability limits and caused an accident with any vehicle that is worth over $10,000 he or she might experience a "financially devastating event!" Here is a question to consider: how many vehicles driven on the road today are worth well over $10,000?
5. Not adding an Umbrella Policy to your personal insurance portfolio.
Dollar for dollar a $1,000,000 umbrella policy is the least expensive form of insurance available today yet few too consumers have this very important coverage. This policy could protect everything from the equity in your house to your savings and retirement plans in the event of a tragic accident.
6. Not taking your credit into consideration.
Like it or not, in today's insurance marketplace, a majority of companies are now using a person's credit worthiness as a major factor in determining what to charge for auto insurance. Traditionally, one's credit history only mattered when applying for mortgages and auto loans; however, since the late 1990's insurance companies' have also been using credit as a rating mechanism. As a result of this fairly new underwriting philosophy adopted by insurance companies', my suggestion to consumers is that they remain diligent about keeping credit scores high.
Thank you for taking the time to read the "Six Deadly Sins Report." You could be just minutes away from lowering your own insurance costs. Take the first step and call or e-mail me for a free, no obligation quote.
Remember you can't save if you don't compare!
Brian Wyatt
317-213-8864
blwyatt@sbcglobal.net
www.brianwyatt.com
There is certainly nothing wrong with these types of insurance companies. State Farm, Allstate, and GEICO are three such examples. However, it would be much more prudent from a consumer's perspective to contact an independent insurance agent. Please understand that independent insurance agents represent numerous different insurance companies and can therefore "comparison shop" your rates with these reputable insurance carriers. This is vastly different from a "direct writer" who only represents their own company and thus only has one rate for the coverage plan to offer you. In other words, whatever your driving record or coverage needs are, it is imperative that you allow an experienced insurance professional analyze your situation and shop around for the best available rate. As there are literally thousands of coverage options from hundreds of insurance companies. Utilizing the skills of an independent insurance agent is the best way to determine what type of policy to purchase from which insurer.
2. Applying for Auto Insurance with low deductibles.
I would recommend that once at least carry a $500.00 deductible on their comprehensive and collision coverage's. This way a policyholder will not be turning in relatively small claims to their insurance provider which could negatively impact their rates. Plus, carrying higher deductibles is an excellent way to significantly reduce one's premiums!
3. Not placing your Automobile and Homeowners Insurance Policies with the same agent.
Once again, from a responsible consumer's point of view, it only makes financial sense to place both of your automobile and homeowners policies together to maximize the savings. For instance, a majority of insurance companies offer a 10% to 20% discount on policies when both the home and auto coverage are placed together.
4. Buying an Automobile Insurance Policy with too low of liability limits.
One should never secure an auto policy with just the state minimum limits. In Indiana the state minimum limits are $25,000 per person /$50,000 per accident bodily injury and $10,000 property damage. Using this example, if an irresponsible consumer purchased an auto policy with these extremely low liability limits and caused an accident with any vehicle that is worth over $10,000 he or she might experience a "financially devastating event!" Here is a question to consider: how many vehicles driven on the road today are worth well over $10,000?
5. Not adding an Umbrella Policy to your personal insurance portfolio.
Dollar for dollar a $1,000,000 umbrella policy is the least expensive form of insurance available today yet few too consumers have this very important coverage. This policy could protect everything from the equity in your house to your savings and retirement plans in the event of a tragic accident.
6. Not taking your credit into consideration.
Like it or not, in today's insurance marketplace, a majority of companies are now using a person's credit worthiness as a major factor in determining what to charge for auto insurance. Traditionally, one's credit history only mattered when applying for mortgages and auto loans; however, since the late 1990's insurance companies' have also been using credit as a rating mechanism. As a result of this fairly new underwriting philosophy adopted by insurance companies', my suggestion to consumers is that they remain diligent about keeping credit scores high.
Thank you for taking the time to read the "Six Deadly Sins Report." You could be just minutes away from lowering your own insurance costs. Take the first step and call or e-mail me for a free, no obligation quote.
Remember you can't save if you don't compare!
Brian Wyatt
317-213-8864
blwyatt@sbcglobal.net
www.brianwyatt.com
Sunday, July 19, 2009
What is Term Life Insurance and some sample rates
What is Level Term Life Insurance? Actually, it is exactly what it sounds like. It is life insurance for a time period that you select—from 5 to 20 years. During that “term” your rates will not increase and your coverage will not decrease. Furthermore, the premiums are very low, just pennies per thousand dollars of coverage.
Why is Term Life so cheap? That’s a very good question and one that aptly illustrates the old saw “you get what you pay for.” Term life is inexpensive because all you have is a death benefit in the event of a tragedy. That is, although the death benefit can be very high—as much as a million dollars or more in coverage if you can afford it and are health-qualified—it has no cash value. This means that if you are more than 30 days late on your payment, it will lapse. And, regardless of what you pay into it, when it reaches the end of the initial period, it usually simply ends. Nevertheless, it is better than nothing and may be quite satisfactory to many people. Plus, the availability of a high face value at low cost will mean the survival of your family if you should die.
Monthly rates on 39 year old male for 100K of coverage for. Rate good for 30 yrs.
Select Choice 10 Year Level Term Series I
$100,000
$10.75
Select Choice 15 Year Level Term Series I
$100,000
$12.83
Select Choice 20 Year Level Term Series I
$100,000
$14.91
Select Choice 25 Year Level Term Series I
$100,000
$16.41
Select Choice 30 Year Level Term Series I
$100,000
$18.08
Thursday, July 16, 2009
What is renters insurance?
Renters face the same risk as homeowners in cases of disasters striking their dwelling. Your landlord or condo association may have insurance, but this only protects the building, not your things in it. Renters insurance can protect your belongings in case of disaster.
What standard policies cover
Fire or lightning
Windstorm or hail
Explosion
Riot or civil commotion
Damage caused by aircraft
Damage caused by vehicles
Smoke
Vandalism or malicious mischief
Theft
Volcanic eruption
Falling objects
Weight of ice, snow, or sleet
Accidental discharge or overflow of water or steam from within a plumbing, heating, air conditioning, or automatic fire-protective sprinkler system, or from a household appliance
Sudden and accidental tearing apart, cracking, burning, or bulging of a steam or hot water heating system, an air conditioning or automatic fire-protective system
Freezing of a plumbing, heating, air conditioning or automatic, fire-protective sprinkler system, or of a household appliance
Sudden and accidental damage from artificially generated electrical current (does not include loss to a tube, transistor or similar electronic component)
Floods and earthquakes aren't on the list. If you live in an area prone to either, you'll need to buy a separate policy or a rider. In some coastal regions, where hurricanes might pose a threat, you might also need to buy a separate rider to cover wind damage.
Actual cash value vs. replacement cost
Make sure you let your agent know about any particularly valuable items you have.
One thing to look at is whether the insurance company will offer "actual cash value" (ACV) or "replacement cost coverage" for your belongings. As the name implies, ACV coverage will pay only for what your property was worth at the time it was damaged or stolen. So, if you bought a television five years ago for $500, it would be worth significantly less today. While you'd still need to spend about $500 for a new TV, your insurance company will pay only for what the old one was worth, minus your deductible.
Replacement cost coverage, on the other hand, will pay what it actually costs to replace the items you lost, again minus the deductible. In some regions, most insurers write ACV coverage. In others, they'll quote you replacement cost coverage by default. Replacement cost coverage will cost you more in premiums, but it will also pay out more if you ever need to file a claim. Let your agent know about any particularly valuable items you have. Jewelry, antiques and electronics might be covered only up to an amount that won't pay for their replacement.
If you have some items that are unusually expensive, such as a diamond ring, you'll probably want to purchase a separate rider. Without riders for expensive items you can't recover the full loss if it's beyond your policy limit.
Take inventory
Value of a typical single-person household
Furniture: $8,000
TV, VCR, stereo, tapes and CDs: $2,000
Home computer: $1,500
Microwave: $120
Other appliances: $240
Clothing: $3,000
Paintings, prints, photos: $800
Glassware, china, and silverware: $600
Sports equipment: $600
Cameras and photographer's equipment: $800
Books: $700
Jewelry: $1,000
Other property: $4,000
Total: $23,360
To ensure you are compensated for any belongings you lose from a fire, storm or other catastrophe, you should inventory all of your personal belongings. Your inventory should list each item, its value, and serial number. Photograph or videotape each room, including closets, open drawers, storage buildings, and your garage. Keep receipts for major items in a fireproof place.
If your apartment or condominium becomes uninhabitable due to a fire, burst pipes or any other reason covered by your policy, your renters insurance will cover your "additional living expenses." Generally, that means paying for you to live somewhere else.
Additional benefits
Liability protection is also standard with most renters policies. This means if someone in your unit slips and falls, you're covered for any costs, up to your liability limit. If this person sues you, you're covered for what they win in a court judgment as well as legal expenses, up to your policy's limit.
Keeping your premium low
Just like any other type of homeowners insurance policy, your renters insurance premium depends on a number of factors: where you live, your deductible, your insurance company and whether you need any additional coverage.
There are ways to reduce your renters or condo owners insurance bill. Increasing your deductible (the amount you pay before your coverage kicks in) is one strategy. Make sure you can afford whatever deductible you choose. If you're thinking about getting a dog, you might want to think twice. Some insurance companies are reluctant to write policies for owners of certain breeds.
Most insurers offer a discount for "protective devices" including smoke and fire detectors, burglar alarms and fire extinguishers.
Some insurers might offer discounts to policyholders who are over age 55 and retired. Others might offer a discount if you buy both an auto and renters policy (called a multi-line discount).
Brian Wyatt
213-8864
What standard policies cover
Fire or lightning
Windstorm or hail
Explosion
Riot or civil commotion
Damage caused by aircraft
Damage caused by vehicles
Smoke
Vandalism or malicious mischief
Theft
Volcanic eruption
Falling objects
Weight of ice, snow, or sleet
Accidental discharge or overflow of water or steam from within a plumbing, heating, air conditioning, or automatic fire-protective sprinkler system, or from a household appliance
Sudden and accidental tearing apart, cracking, burning, or bulging of a steam or hot water heating system, an air conditioning or automatic fire-protective system
Freezing of a plumbing, heating, air conditioning or automatic, fire-protective sprinkler system, or of a household appliance
Sudden and accidental damage from artificially generated electrical current (does not include loss to a tube, transistor or similar electronic component)
Floods and earthquakes aren't on the list. If you live in an area prone to either, you'll need to buy a separate policy or a rider. In some coastal regions, where hurricanes might pose a threat, you might also need to buy a separate rider to cover wind damage.
Actual cash value vs. replacement cost
Make sure you let your agent know about any particularly valuable items you have.
One thing to look at is whether the insurance company will offer "actual cash value" (ACV) or "replacement cost coverage" for your belongings. As the name implies, ACV coverage will pay only for what your property was worth at the time it was damaged or stolen. So, if you bought a television five years ago for $500, it would be worth significantly less today. While you'd still need to spend about $500 for a new TV, your insurance company will pay only for what the old one was worth, minus your deductible.
Replacement cost coverage, on the other hand, will pay what it actually costs to replace the items you lost, again minus the deductible. In some regions, most insurers write ACV coverage. In others, they'll quote you replacement cost coverage by default. Replacement cost coverage will cost you more in premiums, but it will also pay out more if you ever need to file a claim. Let your agent know about any particularly valuable items you have. Jewelry, antiques and electronics might be covered only up to an amount that won't pay for their replacement.
If you have some items that are unusually expensive, such as a diamond ring, you'll probably want to purchase a separate rider. Without riders for expensive items you can't recover the full loss if it's beyond your policy limit.
Take inventory
Value of a typical single-person household
Furniture: $8,000
TV, VCR, stereo, tapes and CDs: $2,000
Home computer: $1,500
Microwave: $120
Other appliances: $240
Clothing: $3,000
Paintings, prints, photos: $800
Glassware, china, and silverware: $600
Sports equipment: $600
Cameras and photographer's equipment: $800
Books: $700
Jewelry: $1,000
Other property: $4,000
Total: $23,360
To ensure you are compensated for any belongings you lose from a fire, storm or other catastrophe, you should inventory all of your personal belongings. Your inventory should list each item, its value, and serial number. Photograph or videotape each room, including closets, open drawers, storage buildings, and your garage. Keep receipts for major items in a fireproof place.
If your apartment or condominium becomes uninhabitable due to a fire, burst pipes or any other reason covered by your policy, your renters insurance will cover your "additional living expenses." Generally, that means paying for you to live somewhere else.
Additional benefits
Liability protection is also standard with most renters policies. This means if someone in your unit slips and falls, you're covered for any costs, up to your liability limit. If this person sues you, you're covered for what they win in a court judgment as well as legal expenses, up to your policy's limit.
Keeping your premium low
Just like any other type of homeowners insurance policy, your renters insurance premium depends on a number of factors: where you live, your deductible, your insurance company and whether you need any additional coverage.
There are ways to reduce your renters or condo owners insurance bill. Increasing your deductible (the amount you pay before your coverage kicks in) is one strategy. Make sure you can afford whatever deductible you choose. If you're thinking about getting a dog, you might want to think twice. Some insurance companies are reluctant to write policies for owners of certain breeds.
Most insurers offer a discount for "protective devices" including smoke and fire detectors, burglar alarms and fire extinguishers.
Some insurers might offer discounts to policyholders who are over age 55 and retired. Others might offer a discount if you buy both an auto and renters policy (called a multi-line discount).
Brian Wyatt
213-8864
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