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Do You Need Rental Insurance?

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Do You Need Rental Insurance?

Many renters don’t stop to think about what happens if there is a fire, someone breaks in and steals their new TV or stereo, or a visitor slips and falls on their property. The sad truth is; you will be responsible! While your l andlord has
insurance that covers the actual building, that coverage does not include your personal property or liability for injuries which occur in the space you rent ~ be it an apartment or a house and yard.

If a fire should destroy or damage your home, your l andlord’s insurance will cover the structure. It won’t cover damage or loss of your belongings. Neither will it provide for the cost of temporary housing for you and your family.

You may think you don’t own enough personal property to make the cost of insurance worthwhile. 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.
• Clothing
• Art work like paintings or prints
• Dishes, silverware and cookware
• Sporting equipment
• Books
• Jewelry

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, isn’t it?

Are you beginning to see why rental insurance may be a very wise investment?

The cost of rental insurance is based on several factors:

• The dollar amount of your coverage

• Deductibles

• 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 br and 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 or “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 check with whichever company insures your car. 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.

Car Insurance on Rentals

When it comes to car insurance, there are a couple of traps you can fall into. The contracts are complicated and extremely difficult to underst and, and that’s if you even have the time to read them. The fact is that most people don’t read insurance contracts and there is a significant information shortage when it comes to consumers and the contents of their own insurance contracts.

One of the problems with this information gap is that it can lead to wasted money. Every time you rent a car you are asked what kind of insurance you would like. The options are generally to take none, which costs nothing, or you could cover liability insurance, which should cost about $10 per day. Then you have a variety of options to cover the rental cat itself, prices for which vary from company to company and state to state. The full coverage option, which includes liability, passengers, and the rental car usually, comes to about $25 to $30 a day. Most people genuinely don’t know what option they should be taking.

Liability

Liability insurance is the only insurance you are required by law to take out. All the others are optional. That’s the first and most important thing to remember when you’re at the rental desk, and the total price for your two-week vacation car is quickly adding up and up. The other thing to know is that in many cases, you will be covered, to some extent by your existing car insurance. You will have to check your insurance policy to make certain, but for the vast majority of drivers, they will have liability insurance by virtue of their own car insurance, and this will carry over to the rental car.

It is however, unlikely that full or comprehensive coverage will carry over from your own car insurance. This is because comprehensive insurance is calculated based on the value of your car. Insurers don’t want to be in a position where they set your policy based on your say, $15,000 vehicle, and then have to pay out when you crash a $40,000 rental. So your policy will state that only liability insurance is provided when you rent.

Credit Card Cover

You may still require no insurance from the rental company however. This is because many credit card companies, including both visa and MasterCard, offer this insurance if you pay for the rental with one of their cards. This is a major benefit of using a credit card and should not be wasted. Again you should check with your credit card provider what they cover, but the bottom line is, if your own insurance covers liability, and your credit card covers the rental car, why pay a couple of hundred dollars for extra insurance when you’re already covered?

If you are in doubt as to your insurance, it is wise however to take the rental company’s policy, especially liability.