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Renter's Insurance

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on 4 December 2015

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Transcript of Renter's Insurance

Renter's Insurance
Renter's Insurance Terms
- the amount paid to your renters insurance company before they start paying. The deductible needs to fit your own financial circumstances.

Replacement Cost
- tells you how much it will cost you to replace all your things without any insurance. Also, this is the actual cost in
dollars to pay for your valuables.
Renter's Insurance Terms (2)
Actual Cash Value
- This is different from replacement cost, since you arrive at actual cash value by subtracting depreciation from
replacement cost

- To lower in value over time, sometimes because of inflation.

Renter's Insurance Terms (3)
Personal Injury
- This is pretty important in renter's insurance, because items can be replaced but injuries because of damage or burglary can be lasting, which renter's insurance helps out with. Personal injury refers to damage incurred through burglary, landlord's hazardous doings, etc.

Renter's Insurance Terms (4)
- The liability aspect of renter's insurance is pretty important, because it covers bodily injury and property damage to people that you may have caused, which can be extremely expensive depending on the damage.

Property Damage
- Renter's insurance covers property damage, and this is a beneficial aspect of the insurance since it usually follows you where you go. This means that you have insurance if you accidentally break someone else's property.
Renter's Insurance Terms (5)
- Having a list of your inventory, or the things that you own, is very important because it's what the insurance company will reference to when giving you your benefits payments.
"The average cost of renter's insurance is about $12 per month for $30,000 of property coverage and $100,000 of liability coverage according to the Independent Insurance Agents & Brokers of America."

This information shows how renter's insurance is surprisingly cheap, and the benefits, tens of thousands in coverage, definitely outweigh the cost of $12 per month.

"Among renters, only 37 percent said they had renter's insurance."

This shows how renter's insurance is definitely not taken advantage of enough, since little more than a third if renters own it.

Visual Aid
This is a piece of rental property that may have renters insurance coverage:
Case Study
Tom's renter's property has a fire because of a neglected candle, and it caused major damage. The property had renter's insurance, and the property was damaged greatly. Tom's property is insured for $10,000 and the deductible is set at 5%. This means that Tom has to pay $500, and then the insurance company pays the rest. Tom is glad he had rental insurance.

Renter's Insurance Scenario
The Davidsons have now bought renter's insurance. Their deductible is $650, which means that they'll be required to paying the first $650 in losses the next time a disaster occurs.

replacement cost
of their kitchen was $20000, given the value of today's dollar. However, the Davidsons bought their home several years ago, and adjusting for inflation, the
actual cash value
is about $18500.

Our real life story follows my neighbors, the Smiths, who tried to cook a turkey for Thanksgiving. Cooking oil ended up spilling, and with all the heat from the oven running, the kitchen caught fire. Unfortunately, the Smiths did not have insurance on their rental property, and they sustained $20000 in damages.

Clearly, having insurance would have saved the tenants a lot of money, since they now have to pay $20000 to rebuild the kitchen. This shows the importance in rental insurance, and how if you think you may need it, it's probably best to go ahead and buy the coverage.
Real Life Story
What does the policy cover?
- Renter's insurance mainly covers your valuables that may be damaged in the event of a disaster on a rental property.

Who needs rental insurance?
- People who don't own the place they live, and want to avoid losing their possessions.

Jake Williams
Josh Glor
Full transcript