subject: Why Should I Carry Tenants Contents Insurance? [print this page] Tenants contents insurance is a needed coverage for anyone living in rented home, apartment or flat. While your landlord carries insurance on the building, that insurance doesn't cover your belongings. And to verify this, you'll find that your landlord usually has this explicitly stated in your lease. You also need liability insurance, which comes with the purchase of tenants contents insurance, just in case your pet cat decides to use a guest as a scratching post and that person decides to sue you. Also, if you cause accidental damage to the building, such as start a fire with a crock pot or create smoke damage with a failed effort at supper, you'll not only be responsible for cleaning your items but may have to pay for sealing and repainting the rental. This is particularly important if you're in a multifamily home.
In order to save stress and know the proper amount of tenants contents insurance, you need to make a list of the items you own and the price. It really helps if you simply go through the house with a camera, either a movie camera or still photo camera. Take pictures of everything. If you are using a movie camera or a camcorder, keep a running vocal narrative and say the price and the year of purchase of everything you can identify. Down load the video or photos and email them to yourself or keep it in a separate place from your home, such as at your parent's house or a safety deposit box. If there's a fire or major damage, you can use any computer to access your email and if you keep it away from your home, you prevent damage to it in the disaster. It makes filing a claim for tenants contents insurance easier.
Once you know the tenants contents insurance amount, secure quotes for replacement cost in your tenant insurance policy. This is a very important coverage for every person who purchases tenant insurance. If you have a loss without replacement cost, the insurance adjustor calculates the cost of the goods and then asks you how old each item was. He then depreciates the item. If you lost a refrigerator in a fire that originally cost $500 but didn't have replacement cost, the adjustor might value it at $50 or less because of depreciation for age. It would cost you far more to replace the item with a new one. By adding replacement cost on your tenant insurance, you'd receive a settlement for the price of a new comparable refrigerator.
Tenants contents insurance normally has an upper limit for payment on specific items. For instance, furs, cameras, jewelry, musical instruments, electronic equipment, silverware, guns, fine art, collectibles such as stamps or coins, and some sporting goods, like golf clubs have a limit on the amount of coverage your tenants contents insurance policy pays. You can increase the coverage on your tenants contents insurance two ways.
The first way is to add an extra rider that is a blanket coverage increase on that type of item. If you have $3,000 worth of jewelry, but no one item is more than $200, you would use this type of rider on your tenants contents insurance policy to increase your jewelry coverage for all your jewelry. Be aware there is a per item limit.
If you have one particularly expensive piece of jewelry or other personal property, you need to have a scheduled rider on your tenants contents insurance policy. A scheduled rider insures a high-ticket item costing more than the blanket coverage limit, such as a $5,000 diamond necklace. You'll need to get an appraisal and a photograph of the item to add this rider to your tenants contents insurance policy.
Another important consideration on your tenants contents insurance policy is business property. If you have a few items, normally under $2,500, you use in a home based business, such as special computer programs for online pursuits, you can add a rider to your tenants contents coverage. Contents insurance policies normally don't cover business property otherwise. If you have costly inventory or equipment that is more expensive in your home, consider a business operators policy instead.
You can add a number of liability riders to your tenants contents insurance policy. Increasing the liability coverage is the first one to consider. Does the policy offer enough to pay for the building if you, your family or one of your appliances starts a fire? If you volunteer and someone sues you for damages they believe you caused, a volunteer liability rider adds that protection to your tenants contents coverage. You also can add some business liability to your tenant policy.
Finally, check the amount per day and the number of days for additional living expense. If something happens that damages your unit and needs more than minor repair, you may have to move out and live someplace else for a few months while the reconstruction is being done. Since the only places that rent for shorter periods tend to be costly, you'll want the payment from your tenants contents insurance to be at least as high as the cost of a rent-by-the day or week room in your area.
If all things are equal, finding a cheap contents insurance policy is always better. Insurance company rates are primarily based on the losses they have to pay for, the money they make from their investment portfolio, and the costs and expenses they incur in the normal part of doing their business. That high dollar policy might be more expensive because the company took the executive staff to Hawaii, not because the coverage is superior.
by: Zach Carson
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