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How to Get the Best Coverage for the Cheapest Price When Someone Else Owns the Place Where You Live
Only 29 percent of renters have insurance to protect them from the what-ifs of everyday life —the majority of renters don’t realize that their landlord’s policies won’t cover them for sudden losses or any personal liability: · Joe Napravnik didn’t need to work 30 years at the Omaha, Nebraska, Fire Department to know the need for renters insurance….his apartment was destroyed by fire when he was a college student without insurance. That day, he was showering at a neighbor’s house when reality hit. “I realized I didn’t have any underwear—I had nothing.” · Within three hours in the early morning of Friday, October 12, 2002, 47 people became homeless in York, Pennsylvania. A fire that started on the third floor raced through walls and the common roofs of 10 row houses. “Everything I worked for is gone,” said Nayelis Oliva, a single mother of two. She did not have renters insurance. · Abigail Bobrow was on assignment as a photographer for a Port Clinton, Ohio, newspaper…when she received word that her building was on fire. Her apartment and all her possessions were a total loss from smoke and water damage. She did not have renters insurance. Most insurance that’s advertised to protect the place you live and the things you own is designed for home-owners. But more than half of all Americans rent their apartments or homes. That’s where Silver Lake Publishing’s new book, RENTERS INSURANCE: How to Get the Best Coverage for the Cheapest Price When Someone Else Owns the Place Where You Live steps in to inform people of the risks they’re taking by not owning policies. It doesn’t matter whether you’re renting a town home, a modest condominium, a bachelor pad or a 10,000 square foot penthouse: a fire could burn through your unit and leave you homeless for months; a FedEx guy could slip on your doormat and bill you for medical payments, pain, suffering, lost wages and then try to sue you for negligence; over a vacation, a thief could break in and take your most prized possessions—an entertainment system, top-shelf computer, fancy bicycle, heirloom jewelry and favorite leather coat. Think you don’t own enough valuables to justify purchasing renters insurance? By the time most Americans finish school, they’ve accumulated things that add up to an average of $30,000 in replacement value. And that only becomes a bigger issue as the years go by and you continue to acquire assets. (If you happen to be a college student and think your parents’ homeowner’s policy covers you sufficiently, think again.) RENTERS INSURANCE, the ninth title in Silver Lake Publishing’s series on consumer insurance issues, explains to readers how renters insurance works...and how they can make sure any renters insurance they buy works when they need it. The book includes analysis of standard insurance policy forms, case studies of problems and solutions and interviews with industry insiders who know how this type of coverage works. While it’s nearly impossible to prepare completely for the perils of everyday life, it’s easy to find ways—tools—for minimizing the effects of those perils. A renters insurance policy is one such tool, and a very affordable one at that. Broken down into monthly installments, the average cost of most policies is the price of a small pizza. In this book, you’ll find useful discussions of the following critical topics: · Why renting poses certain, unavoidable risks. · How to assess your needs for a renters policy…and take personal inventory of your assets for finding the right coverage at the right price. · Understanding the terms to your policy and the mechanics of what it can do for you…in good times and bad. · What to do when disaster strikes and you must make a claim on your policy. · How to evaluate your needs for extra coverage in the form of riders, an umbrella or business policy. · Basic tips for renting and dealing with the everyday responsibilities of living on someone else’s property. · How to ensure adequate coverage for natural disasters such as floods and earthquakes. Renting is easier than owning a home because you don’t have to worry about things like a mortgage, property tax, homeowners associations and making home improvements. But you do have to worry about your possessions, your personal liability and your peace of mind when it comes to living in a place you don’t own. That’s where RENTERS INSURANCE comes in to play — giving you the information and the tools you need to protect yourself from theft, disaster and personal liability. The Silver Lake Editors have been publishing books on insurance topics for more than a decade. Their other titles include Get Your Claim Paid, “What Do You Mean It’s Not Covered?” and It’s All Your Fault. The Silver Lake Editors Trade Paperback 260 pages (4 1/2" x 7 3/4") Price: $11.95 ISBN: 1-56343-767-8
Silver Lake Publishing; July 2005
257 pages; ISBN 9781563438196
, or download in
257 pages; ISBN 9781563438196
, or download in
Risk is a part of everyday life. Most people—especially young people—avoid thinking about risk until something bad happens. The what-ifs get left behind as we worry about more urgent and pressing problems like work, family and money. Although bad things happen to good people, many would rather bank on the false idea that nothing bad will happen to them, than plan for misfortune and disaster. Most would rather put off worrying about what could happen, and instead, focus on the now and what is happening. But truth is, you never know what could happen that could wipe you out financially. Aside from health and auto issues, other common problems often relate to where we live. Nationwide, close to 68 percent of Americans own homes; the other 32 percent rent.1 In cities, those numbers are almost reversed: 69.8 percent of New Yorkers rent; 61.4 percent of Los Angelenos rent; 56.2 percent of Chicagoans rent; and 54.2 percent of Houstoners rent. Renting is easier than owning a home because you don’t have to worry about things like a mortgage, property tax, homeowners associations and making home improvements. There are benefits to owning a home (as well as a few pitfalls)…but that’s another book. The focus of this book is on those who rent, because even though renters usually find that they don’t have to pay for maintenance, garbage removal, utilities and water, etc., they may find themselves responsible for, well, some bad luck. It doesn’t matter whether you’re renting a town home, a condominium, a bachelor pad, a single-family detached home or a 5,000 square foot penthouse. You could return from a business trip and find that everything you owned has been burned by a fire. You could leave the bathtub running for too long and flood your apartment, as well as two units below you. You could be sued by your favorite FedEx delivery man for causing him to slip and fall because he didn’t see those boxes you left out in the hallway. Ask yourself, can I afford to reverse the consequences of something bad happening? Assume you can’t rely on anything but your own bank account. Could you replace all those burned items and pay for living somewhere else until the building is fixed? Could you cover the damage done to your and your neighbors’ apartments by the bathtub water (including their ruined personal items)? Could you open your wallet up to the FedEx guy’s bill for medical payments, pain, suffering, lost wages and negligence? Probably not. If, however, you could pay as little as $10 a month and be covered for when the what-ifs happen, you’d probably do it. Even if you think you’re at low-risk for having accidents, you can’t immunize yourself from someone else’s negligence or getting sued for your own personal liability. And this is why renters insurance is key. You don’t have to be renting an historic Victorian in the city or a spacious co-op in a trendy suburban enclave to need some insurance on the place that you live and the things that you own. And you don’t need to be an ex-dot.comer, who collected millions before leaving that world to recline in rented manors and collect antiques, to need protection from sudden losses. By the time you graduate from college, you already have enough reason to get some insurance. Although you may not be “worth” that much because you carry debt in the form of student loans and credit cards, you’ve probably accumulated things that can add up to roughly $30 thousand in replacement value. In other words, if you were to inventory your personal belongings and add it all up, that’s what those things would be worth to you. It may seem like a lot for someone who is just starting out in life, and who may not even have a job, but think about all those electronics, CDs, books, cupboard things, appliances, gadgets, clothes and furniture items. If you lost everything overnight, more than likely you wouldn’t be able to replace everything overnight and out of your own pocket. Despite the value of having a renters policy, only 29 percent of renters have one. Why? There are many reasons, stemming from not knowing what a renters policy is (or even knowing that renters insurance exists), to not understanding how insurance works and what it can do for you. Not comprehending how much money you have in your possessions and what they are really worth to you is the most common mistake. But think again what it would feel like to lose everything in an instant. For those lucky few who spill out of college and land some high-paying job, your income may be your most valuable asset. So, if you have a friend come over to help hang blinds, and she falls and breaks her leg, you’d rather have a policy pay for her medical bills than your future income. Some common myths about insurance include: My landlord has insurance, so if anything happens the landlord is responsible and his policy will cover me. This isn’t true. The landlord’s policy covers the physical building, but not your possessions. Even if the cause of your loss is blamed on the landlord, he won’t pay for replacing your possessions. And, if it’s determined that a fire or flood, for example, was caused by you—by mistake—then the landlord might come after you in a lawsuit to recover his damages. Liability is another reason not to rely on your landlord’s insurance. When someone finds you liable for injuries or damage, you can’t rely on your landlord for help. Insurance costs money and I don’t have extra money for things like that. The average cost of renters insurance is $160 per year for around $15,000 in coverage. Some policies cost less, some more. It all depends on how much you own. If you live in a strappy one-bedroom with a computer, TV and stereo, you’d probably pay close to $125 a year. Broken down into monthly installments, that’s the cost of a small pizza. And, even if you’ve got a lot to protect and your policy runs you $250 a year (for that rosewood armoire and top-of-the-line road bike), the monthly cost to you is around $20—or the cost of a large pizza. For more coverage, you’ll pay more. A policy, for example, that costs $350 a year can give you $50,000 in coverage. My building has never had a problem and I live in a good neighborhood. For this exact reason, you need a policy. Insurance is a cushion for when the unexpected happens. If your building hasn’t experienced a fire, robbery or water damage, then an unexpected event is all the more likely to happen. Nothing will happen to me. Really? Many like to live risky, but everyone frowns upon having to empty his wallet when something does happen. Renters are responsible for the financial burden of losses created by their own negligence—or by accident in their own dwelling. Apartment fires and theft are the leading reasons renters suffer losses. Even when those losses are caused by a grease fire in a neighboring unit, you are responsible for your losses. In this day and age, it’s hard to bank on something not happening, or something not happening to someone else, which in turn affects you. My roommate has a policy, so I don’t need one. Not necessarily true. While every policy differs, most will not cover you unless you are listed on the policy. If you are living with someone (or several people) in a unit, you should acquire your own policy for your own possessions if you cannot get added to someone else’s policy. Some insurance companies now offer joint polices for cohabitating couples. I am in college, and under 26, so I am still covered by my parents. Insurance issues get tricky when you reach an age where you’re legally an adult but still under the care of your parents for certain things like health and car insurance. If your parents have a homeowners or renters policy, their insurance might give your coverage in the dorm, but not if you live in an apartment. Check with your insurance agent before assuming anything. I really don’t own enough to justify getting a policy. Again, think about what it would cost to replace all of your possessions—even if those possessions originally came from your parents, your Aunt Lynda or the Salvation Army. If having a policy for your possessions doesn’t appeal to you, at least think about having a policy to cover your liability. You can’t control who will sue you…as the case below reveals. Melissa Cantor and her best friend, Annie Atkins, graduated from an East Coast college, moved out to California and found a great condominium to rent in trendy Santa Monica. The unit was one of six, each separately owned. It was their first renting experience, and they were moved in by October. At the suggestion of Cantor’s stepfather, who happened to be an insurance agent, she took out a renters policy with her auto carrier. According to Cantor, had her stepfather not mentioned a renters policy, she never would have known about it. “I didn’t even know what that was at the time.” Before the furniture arrived, the girls received a letter under their door from their neighbor in the adjoining unit, Gerry Bushnell. He insisted that they move out; and he offered to pay for all of their moving costs. The landlord had warned the girls about this particular man: “Gerry has a lot of allergies, so be careful when you have guests over who smoke, of if you’re grilling or painting…or things like that,” their landlord had said. Neither one of the girls smoked, nor did they have wild parties. They had full-time jobs and used their unit as any renter would. They were not about to move out so quickly, even though Gerry believed that their moving in “wasn’t a good idea,” according to his letter. Cantor and Atkins learned from the other occupants in the building that Gerry wasn’t a nice guy. Even though he had a law degree from a top school, people noted he was freakish. He’d cover his windows with aluminum foil, wear a facemask whenever he left the building and make sure that every piece of skin was covered (i.e., he’d wear long socks). Deliveries at his doorstep would remain there for days. One month after they moved in, Cantor and Atkins received another letter from Bushnell, this time telling them not to use the dishwasher in the evening or early in the morning. He further told them not to wear shoes while inside because they make noise on the hardwood floors. The girls acknowledged the letter, spoke to their landlord again, and believed that they weren’t acting any differently from a typical dweller. They used the dishwasher at legitimate hours and were quiet. In all, they were good tenants. In January, a knock at the door came with papers, serving them with a lawsuit. Among the allegations: Cantor and Atkins infringed upon Bushnell’s right to use his apartment; and housing discrimination. He also sued the landlord and the homeowners association. Specifically, the suit revolved around Cantor and Atkins’s personal care products (i.e., perfume, scented toiletries, etc.), which floated out of their window and into his apartment. Neither Cantor nor Atkins used aerosols, hair spray or toxic chemicals. (The one time they needed to paint a table, they had taken it around the block.) When Cantor and Atkins turned to their landlord, they were surprised to learn that her policy didn’t cover them. However, because Cantor had purchased a renters policy, they managed to file a counterclaim in response to the suit and successfully defend themselves. In fact, the girls didn’t have to do much once the insurance company took over; it handled all the paperwork and the legal gymnastics, representing Cantor and Atkins in court. It took a long year, but eventually the case was thrown out of the courts. “If it hadn’t been for my policy, I don’t know what I would have done. I was just out of college; it was my first renting experience, and I didn’t have any money to deal with a lawsuit—frivolous or not,” Cantor said. You wouldn’t want running into a person like Bushnell to be your wake-up call to a renters policy—or any protective insurance policy for that matter. Renters insurance is a form of homeowners insurance for renters. It’s also called an HO-4 policy and it covers the cost of replacing personal property in the event of a loss from fire, natural disaster or robbery. If someone else injures himself while in your rented unit and needs medical care, the policy would help cover those costs. And, if you are sued for negligence, the policy would defend you; if you are found liable, the policy would provide some coverage for what it takes to get you back to where you started—before the problems arose. Just because you don’t have a million dollars doesn’t mean you can’t be sued for a million dollars or more. Suddenly, everything is gone—savings, future income, your personal property and your peace of mind. Renters insurance is available from most property and casualty insurance companies. Some confusion comes from the fact that the coverage is called different things by different companies—the contents broad form, broad theft coverage or tenants insurance—but, whatever it’s called, the coverage is inexpensive enough to be worth a look from just about any renter. Two other important things a renters policy covers, which most people don’t think about, are: 1) the loss of property when it occurs away from your apartment, such as gold clubs or a bicycle stolen out of your car; and 2) temporary living expenses should you be displaced from your apartment while the building is being fixed, or aired out for smoke damage. Most policies offer limited coverage for temporary living expenses. This is also called the loss of use or additional living expenses clause. The policy will cover expenses above and beyond your usual living expenses. If, for example, your rent is $1,250 a month and it costs you $2,500 to stay in a hotel for three weeks, you would be reimbursed $1,618. The balance of $882 would be deducted as your typical living expense. You policy might set daily limits to this loss of use clause. While you may not be able to live at the Ritz Carlton while waiting for your shoebox to be repaired from a small fire, some policies allow for reasonable expenses such as meals and travel. This is when knowing the exact terms of your policy is important, and asking about the specific details (e.g., length of time and amount) of its allowances. Some companies offer fair cost limits, in which case you are covered for maintaining your normal standard of living in a relocated spot, not to exceed X number of months. If a fire puts you out of your rented unit, and you can’t even fetch your wallet out of the flames to pay for a new toothbrush and clean underwear, a check or cash can be delivered to you by the insurance adjuster or agent right away to help pay for such necessities on the spot. This is also called loss mitigation. It doesn’t matter who caused the fire or where the flood started; regardless of the problem’s origin, you will have to file the claim to your own insurance company. If the source of the fire or flood was in a neighboring unit, you will need to rely on your own policy for help. Your company will try and get reimbursed from the company of the policyholder who is responsible for the damage—if such a policy exists. If your neighbor doesn’t have a policy, then the most you’ll have to pay is your deductible. It may not seem fair to have to pay a deductible when someone else caused the damage, but at least you’re covered on your end and you don’t have to worry about getting someone else to help pay for your damages. Your insurance company will do everything it can to get money from the neighbor. The only way you’ll get out of paying your deductible is if your insurance company succeeds in getting that money back from the neighbor’s insurance company or if a miracle happens and your neighbor feels sorry for you…and he gives you the money. Throughout this book, we’ll go into the finer details of a renters policy. It’s important to keep in mind that this is a policy for your possessions and liability. You do not need to insure the building in which you live. And, if you don’t want to pay for liability protection (which isn’t a good idea) you can opt for a policy that covers only personal property. When you file a claim, you can’t expect an insurance company to pay for 100 percent of the costs related to damages. This protects the insurance company from frivolous claims and makes you responsible for a portion of the damage. If, however, you are found not liable nor at fault for an event, your company may reimburse you for the deductible if it can recover that deductible from the policyholder who caused the damages. Deductibles for renters insurance differ depending on your policy and the amount of your premium. The standard policy has a $250 deductible, but you could find a policy with a deductible as low as $100 or as high as $500 or $1,000. The general rule with it comes to deductibles: The higher the deductible, the lower the premium. If you want a low premium, you’ll have to pay a higher deductible if and when something happens. For this reason, it’s important to balance your ability to cover the deductible with the monthly premium savings. Deductibles make it pointless to claim certain things. For example, if you have a $1,000 deductible, it doesn’t make sense to put in a claim for the destruction of your $1,000 couch from a wine party or water damage to your $600 leather coat when the pipes in the wall by a closet froze and burst. If you must pay $1,000 first before your policy kicks in, there’s no reason to claims these items. Remember: policies don’t kick in unless a claim is for more than a deductible. In many cases, a person’s most valuable asset is a computer. So, if you get home one day and your $2,000 computer is gone, and your deductible is $250, the insurance company will cover you for $1,750. We’ll talk more about this later, however, because depending on the value of your electronics or other expensive assets, you may have to obtain an endorsement or rider for these items in addition to your basic policy. And this is when the difference between replacement cost and actual value is key. There’s a big difference between these two kinds of renters insurance: Cash value coverage pays for what the property is worth at the time of the loss. If your policy is for actual cash value of your possessions, then you will get the value of your assets minus depreciation. Thus, your three-year-old computer and five-year-old couch will be valued much less than what it will cost you to replace those items. And you insurance company will evaluate what those items were worth when they were damaged or stolen before writing you a check. Replacement cost coverage pays for what the items cost to replace in today’s market. So, if you have this kind of coverage, your insurance company will pay what it takes to replace your losses. You can go and buy a new computer and new couch (of similar kind and quality to your originals) and the insurance will cover the complete current cost of buying those items. This coverage is more expensive, but it’s considered a bargain among industry experts. For a few dollars more a year you can have replacement coverage and not worry about being unable to completely replace your losses. Some companies offer only replacement value coverage, or quote this coverage by default. Deductibles still apply to both kinds of coverage. The monetary difference between buying a cash value policy and a replacement value policy is minimal when compared to the difference between what these two policies mean to you as a consumer. If you lose your possessions, you wouldn’t want to replace those possessions with second-rate items, affordable only because your policy gave you cash value. You’d want coverage that would allow you to go out and replace your possessions in the current market. For example, if a fire melts your entertainment center, you’d want a new one rather a check for what yours was worth when the fire destroyed it. This is why agents suggest that renters choose replacement cost coverage. You don’t have to rent an apartment to need a renters policy. If you are renting anything—a condominium, a home, a studio, even an illegal unit—you should consider a renters policy. Stories of lessons learned the hard way go something like this: You rent a home and think that your landlord’s homeowners policy covers you…and then you return from a trip and find that your place has been ransacked. Your possessions are half-gone, half-destroyed, and you beg the owner of the property to replace all of your stuff—because you think that the broken front gate caused the break-in—all to no avail. Never rely on someone else to protect you and your possessions. A property owner will have property coverage for the actual building, but not for your own personal things. And if you do something stupid in your rented home, for which you are found liable, you’ll want to have that coverage to help out. Otherwise, you’ll be seriously out of luck and out of a place to live. Another lesson often learned the hard way relates to acts of God, which most polices exclude from coverage unless you ask for these to be specifically included. Typically excluded (or insufficiently covered) from homeowners policies, for example, is coverage for floods and earth movements (i.e., earthquakes, landslides, earth sinkings, etc.). Even the coverage for fires have very particular terms to them. Homeowners must ask for additions to their policies if they want these things covered—or covered more sufficiently. And renters must do the same. Under a basic policy, coverage for personal property can include losses caused by the followed named perils: • fire or lightning; • windstorm or hail; • weight of ice, snow or sleet; • explosion; • aircraft and vehicles; • smoke; • sudden and accidental tearing or bulging of heating or cooling systems; • windstorm or hail, • theft, riot or civil commotion; • falling objects; • volcanic eruptions; • broken glass; • artificially generated electrical discharge; • vandalism or malicious mischief; • sudden and accidental water discharge from plumbing or appliances; and • freezing of plumbing systems. But coverage for earthquakes and flood are separate. In Chapter 6, we’ll look at how insurance for earth movement and serious water damage is handled. The point here: Renters must be careful to read their policies for exclusions. If, for example, you live on a riverbank or close to an area where hurricanes are a sure thing every year, you might find that a basic policy won’t cover you for losses that arise from these events, and that you may have to seek additional coverage under an endorsement. It’s nearly impossible to acquire flood insurance from any commercial insurance company. Flood insurance is available through the federal government’s National Flood Insurance Program, which works with insurance companies to insure customers. Earthquake insurance works similarly. Take the experience of Kim Lewis, for example. In 1999, the 32-year-old woman returned to her rented house by boat after Hurricane Floyd whipped through. When she called her insurance company, she discovered that her renters policy didn’t include flood insurance. Thousands of dollars worth of ruined clothes, appliances, electronics and other personal belongings wouldn’t be replaced by the insurance company. When flood insurance is offered on a basic renters policy, it’s usually limited to floods that result from broken pipes and accidental discharges or overflows of water. You’d also be covered if a flood results from a fire, explosion or theft. We’ll go into more detail later about these types of exclusions and inclusions of a renters policy. For now, it’s important to note that policy terms can make a significant difference. As mentioned above, if you need additional coverage for items not included on your basic renters insurance, you must obtain specific endorsements to your policy. These are also known as riders or floaters. Endorsements, floaters or riders are like amendments—they add coverage or conditions to standard insurance policies. You may need these for special items like jewelry, furs, fine arts, sterling silver flatware, antiques and other collectibles. If you own pricy electronics, such as a computer are worth more than $5,000, you’d probably need a special floater for that, too. In Chapter 3, we’ll discuss how you go about listing your personal possessions and determining how much coverage—and what type—you would need. Basic policies will either not cover some special items, or they will limit their coverage. If you own a 2.5-carat engagement ring worth $20,000, you’d want to get a personal articles floater, also called a personal property endorsement to cover that ring. Otherwise, your basic policy will only cover the standard $1,000 or so. And, if you own a lot of expensive jewelry, you’ll need to ask about what the aggregate limits to your policy are. In many cases, there are limits for any single item, as well as limits for aggregate losses. If you lose an entire jewelry box full of watches and precious and semiprecious stones, don’t look to your basic renters policy for help. More than likely, it will cover you for no more than a few thousand dollars without a floater. Also in Chapter 3, we’ll go into great detail about floaters and how you can best insure your special possessions. As with exclusions, know what your limits are on your policy. These are clearly indicated on the Declarations Page of your policy, typically the first page of the document. The declarations page will include the following: å Important Notices; å Coverages (both property and liability); å Options; å Credits; å Deductible(s); å Annual Premium; and å Other Forms Applicable to the Policy. Under important notices, the policy will say something like: “Your new policy is effective January 15, 2002. This policy does not provide earthquake coverage.” Under coverages, there will be a simple outline describing the terms to your renters policy. This is where your limits are listed, for both your personal property and liability coverage. Although the average cost of renters insurance is $160 a year for $15,000 worth of personal property coverage, this isn’t a good estimate because each and every policy differs. A basic policy for living in a nice part of town (where theft is also prominent because of all those nice possessions) may set personal property limits around $15,000 and personal liability limits around $100,000 for $260 a year. If you think you need more coverage, ask for more. It’s always easier to pay a little more a year for greater coverage with higher limits than to pay out-of-pocket expenses for a major loss when it occurs and you’ve exceeded your limits. Whether you’ve chosen a cash value policy or a replacement cost policy will be indicated under options, or a similar heading on the declarations page. Any credits applicable to your policy will be shown. As we’ll see later, you can get a discount (sometimes 10 percent) for having a renters policy with the same insurance company as your auto or other insurance. Also included on your declarations page is your deductible. This may be shown as a percentage of your coverage or as a flat-out dollar amount. Finally, your annual premium will be clearly marked. Any other policy forms that apply will be listed briefly by their form number, and shown in detail on following pages. Renters comprise the vast majority of city-slickers. From high-rent zones to low-rent districts, cities abound with all types of renters. And they all have something to protect. Throughout this book, when we refer to policies, we are talking about the basic HO-4 form. Although we will mention other types of policies, such as a dwelling-only policy, HO-6 form for condominium owners and HO-8, or modified basic form, if you’re a renter, you really only need to concern yourself with the HO-4 broad tenant form. In the early 2000s, as mortgage rates decreased and purchasing power increased, people started snatching up real estate right and left. Homeownership in the U.S. by the end of 2001 was 67.5 percent. But there are still a great many renters out there who, instead of buying homes and garden hoses, have been buying a lot of stuff—all of which deserves some attention. Perhaps the most valuable thing that a renters policy can provide is peace of mind. You don’t have to worry so much about the perils of everyday life. This chapter has touched upon some of the reasons why you need renters insurance, and what this kind of insurance can do for you. In this book, we’ll go into greater detail about the mechanics of renters insurance, what every term in a policy means and how you can best prepare yourself for dealing with some of life’s misfortunes. We’ll also provide some general advice for renting, from choosing a decent place to managing your manager. The next chapter will focus on the mechanics of a renters policy. Then, in Chapter 3 you’ll find some tools you can use to determine the kind of coverage—and just how much coverage you should buy for yourself. It all comes down to how much your possessions are worth.
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