When it comes to your personal space, it's important to have adequate protection. Whether you rent or buy, there is an insurance plan that is right for you.
Homeowner's Insurance
When you buy your own home, everything becomes much more valuable. Your personal items and, most importantly, that house is your responsibility, and they should be protected from the many threats out there lurking. Homeowner's insurance is the kind of protection you need to not only give you assurance that your new property is covered from many kinds of disaster, but also your personal belongings as well.
The typical homeowner's insurance plan covers sixteen points of possible damage. These include:
- Damage from fire and lightening
- Damage from windstorms and hail.
- Explosions
- Riots and civil commotions
- Any damage caused by aircraft
- Any damage caused by a vehicle
- Smoke damage
- Vandalism and mischief
- Theft and burglary
- Volcanic eruption
- Damage from falling objects
- Damage caused by the pressing weight of ice, snow and sleet
- Accidental damage caused by and overflow of water and steam. This includes discharge from within plumbing, heating, air conditioning, automatic fire sprinklers, and household appliances.
- Cracking, burning, and bulging of a steam or hot water heater, air conditioner, and automatic fire sprinklers if sudden or accidental.
- Damage caused by the freezing of plumbing, heating, air conditioning, fire sprinklers and household appliances.
- Damage caused by an artificially generated electrical current.
Homeowner's insurance does not contain an earthquake or rising water provision, however. These are most often added as a supplement to a policy if you deem either a flood or earthquake a legitimate concern for your location.
A homeowner's insurance policy also automatically includes personal belongings up to 40% of your insurance policy value. This means your $200,000 homeowner's policy includes $80,000 worth of personal belongings. You can include additional coverage for personal belongings as a supplement to your plan.
Renter's Insurance
Renter's insurance offers you protection for your personal belongings when you don't own your own home. Should there be a disaster such as those listed above, your landlord will likely have coverage on the buildings, but your possessions are not included in his policy. To protect your property, you'll need separate renter's insurance.
Renter's insurance is offered in an amount large enough to replace your items should they be destroyed in one of the scenarios covered above. You should be careful, however, to document exactly what you own and to be sure your policy pays for a replacement or pays out the “actual cash value” of an item. This would be the difference of paying for a new large screen television when yours is destroyed or paying you the amount it would take to buy the same five-year-old television you had.
In addition to protecting your property, renter's insurance also protects your interests. Should your apartment become unlivable due to fire or other emergency, your renter's insurance will pay additional living expenses. This means your policy will pay for you to live elsewhere until your apartment is repaired.
Finally, renter's insurance also includes liability. This covers you in the event that someone gets hurt while inside your apartment. You'll be covered up to the limit of your coverage.
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