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All About California Rental Insurance
Many renters in California don’t stop to think about what happens if there is a fire, if someone breaks in and steals their new LCD TV or stereo system, or if a visitor slips and falls on their property. The sad truth is; you, the renter, will be responsible! While your landlord carries insurance that covers the actual building, that coverage does not include your personal property or liability for injuries which occur inside the space you rent whether it’s an apartment or a house and yard.
If a fire should destroy or damage your home, your landlord’s insurance will cover the structure, but it won’t cover damage or loss of your belongings. It also won’t provide for the cost of temporary housing for you and your family while you are displaced.
You may think you don’t own enough personal property to make the cost of insurance worthwhile, but you’re probably wrong! If you sit down and add up the cost of everything you own, you may be in for a big surprise. Consider what you have invested in such things as:
• Furniture and accessories
• Electronics like TV, stereo, computers
• Small appliances like microwaves, toaster ovens, etc.
• All of your clothing and shoes
• Art work like paintings or prints
• Dishes, silverware and cookware
• Sporting equipment
• Jewelry and watches
Could you afford to replace all of these things? Even worse, what would you do if a friend is injured on your property and decides to sue you for medical costs and more? It’s a scary thought. Hopefully you are starting to realize why rental insurance is a very wise investment.
The cost of rental insurance is based on several factors:
• The dollar amount of your coverage
• Whether you choose to be reimbursed for Actual Cash Value or Replacement Costs (more about that in a minute)
• Where your rental property is located and the number of previous claims made, not only by you, but by others living in the same area.
Let me explain the difference between Actual Cash Value (ACV) and Replacement Costs. ACV is the value of your property at the time a loss takes place. For example, if your television set is five years old, it’s valued at much less than if it were brand new. The lesser amount is what you are reimbursed.
However, if you opt for Replacement Cost, you’re paid whatever it costs to go out and buy a new TV with similar features. Insuring for replacement cost raises the amount of your premium so it’s a good idea to get quotes for both ACV and Replacement Cost policies. Then you can decide which option fits your needs and budget.
Another thing to keep in mind is that jewelry, valuable collections, and guns are usually covered under a separate policy typically called a “rider”. If you own these kinds of items, be sure to tell your insurance agent. You don’t want to find out after disaster strikes that they aren’t covered or that they aren’t covered for their true value. One way you can reduce the cost of your rental insurance is to combine your policies, so check with your auto insurer and if they provide rental insurance you may be eligible for a multi-line discount.
Rental insurance may be worth the investment just for the peace of mind it offers you. Contact us at Pacific Security Insurance to discuss your rental insurance needs.