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Thanks for making it easy to find the cheapest renters insurance. Knowing our stuff is always protected gives me peace of mind.

Matt and Bethany, Charleston SC

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Renters insurance is a tremendous insurance resource for renters living in an apartment or other rented home. It includes a range of areas protecting you as a covered policy holder from a variety of threats. Renters insurance includes both property and liability coverage, plus additional benefits to round out each plan. But there are certain things which are not covered by a renters insurance plan. Certain exclusions and limitations do exist in renters policies, and these should be examined and taken into account before you buy a policy. A consumer should know what he is getting before buying any kind of insurance product.

Renters Insurance Covers Many Events

In terms of what is excluded and excluded from a renters insurance policy, it is useful to begin by examining the personal property coverage of said policy. Personal property insurance insures the covered policy holder's personal possessions against covered loss due to any specifically listed covered circumstance. Most plans have fairly consistent and predictable lists of what kinds of events are included in property policies. Most people think of fire and theft when think of renters policies, but other areas of protection include fire, lightning, windstorm, hail, explosion, riot, smoke, vandalism, aircraft or automobiles, broken glass, falling objects and more [1]. There other included events as well. For a complete listing, you can consult with a provider in your home state.

This list can give you a good idea of the scope of property provisions in a rental plan. This protection is extremely valuable if any of these covered event types comes up in your life as a renter. For example, if a windstorm sweeps through your condominium and shreds apart some of your personal property and you are not insured, you will be at a total loss with no compensation for the financial cost to you for the damage. But if you are insured with a personal property policy, you'll be saved that potentially devastating financial loss, instead having only to pay out the deductible specified in your contract.

On top of personal property protection, a renters plan also contains provisions for personal liability coverage as well. This part of a renters insurance plan works on your behalf if someone becomes injured at your loft or other family dwelling, or if you or another covered family member cause a covered property loss away from your home. Liability protection in a personal or family renters insurance plan enhances its value by increasing its reach of protection. But rental plans do not by any means cover anything.

Specific Things Excluded from Policies

The extensive list of covered events makes personal property coverage a very useful and valuable part of a rental insurance plan. But this is hardly an exhaustive list including every possible loss occurrence under the sun. In fact, renters insurance plans also have lists of exclusions spelled out for policy holders. Common examples of exclusions are earthquakes, floods, power failure, neglect, war, intentional acts, and nuclear hazards [1]. Earthquake and flood insurance are available in areas where these types of events are a concern to residents, but they represent separate coverage with its own premium.

Paying for this kind of coverage on your house or condo might get expensive depending on the frequency of these events in the area where you rent. However, it still may be worth it to add flood or earthquake coverage to your overall plan of protection. At the very least, it does not ever hurt to get some quotes so you can at least find out for sure what these extra areas of coverage would cost to carry as a renter. The threats of property loss from floods and earthquakes are very real in certain parts of the country, and it is better to pay a little but more money up front than to have to pay a lot of money later to replace things you lost in an uncompensated event.

It is ultimately up to the policy holder to decide whether or not to carry extra protection like flood insurance. In this way, some of the exclusions are the result of decisions made by the insured policy holder.

Limits of Renters Policies

One example of an exclusions or limits basically brought on by the policy holder is the limit of coverage in an area of the renters insurance plan. The maximum amount of renters insurance protection you have as a renter is definitely a form of a limit, and any expenses above that are excluded from payouts you might get in the event of a major claim. The financial limitations you choose for the policies you buy serve as barriers beyond which there is no protection for you as a policy holder. If your townhouse or condominium sustains major damage from a covered event and your possessions are severely compromised, your ability to make a claim against your lost will still be limited based on the amount of coverage you have elected as a covered policy holder.

This leads to another limit of renters policies. These insurance plans are also limited in a sense by the type of coverage you choose for your personal property protection. There are two options for this protection to choose from. You can either go with actual cash value (ACV) or full replacement coverage in a personal property policy. Regardless of whether you are a student or a senior citizen and no matter where you live, your renters insurance personal property policy will be greatly affected by this choice. Renters who choose ACV will get cheaper premiums, while renters who opt for full replacement get better quality coverage. The difference between the two is easy enough to explain.

Actual cash value is really just another way of saying depreciated value. If you file a claim for a covered loss of your two year old flat screen TV, with ACV you will get paid for the loss based on the renters insurance provider's assessment of the TV's depreciated value, or its market value. On the other hand, full replacement implies that a loss will be replaced by a brand new item of similar quality. That flat screen in this case would be paid for based not on any assessment of its value, but based on the renters insurance provider's assessment of what it would cost to buy a new one the same size with similar features today.

ACV is normally the default in a property insurance policy. You should check your plan to know for sure, and know you can always upgrade your renters
insurance plan to reflect full replacement insurance. It will just cost you more on your premium, but that extra cost is not always all that much. It is probably worth looking into at any rate.

Renters can take advantage of the great protective elements offered in every policy. But they should also be aware of what is not included in a renters insurance plan. There are certain things excluded from each policy; no rental plan is comprehensive in the absolute sense. Take a look at getting a renters insurance policy, but do it with your eyes open to exclusions.

[1] Retrieved 2010-02-21.