Personal Insurance Resources

 

Do I really need Homeowner Insurance?

Insurance for Your Home

Insurance is your protection against the uncertainties of day-to-day living. For most people, their home is their single most valuable possession and their biggest investment.

If you were to suddenly lose your home due to fire or a tornado or have the contents damaged or stolen, like most of us, you probably could not afford to replace everything all at once. And if somebody sued you for an injury or damage caused by you or your property, the cost of defending that suit could run into thousands of dollars in legal fees regardless of the outcome of the suit.

All of these situations are covered by the homeowners insurance policy. While it may be unpleasant to think about fire, theft, and other uncertainties of life, let's face it, they are there and things happen.

Yet another reason you need to carry homeowners insurance is that mortgage lenders require it. No mortgage company will lend the large amounts of money needed to finance homes at today's prices without requiring an insurance policy to protect that investment.

Homeowners Insurance Coverage

The following coverage definitions should help you understand your homeowners insurance policy--but be sure to consult your insurance company representative to assure that you have the right coverage for your needs.

Dwelling Coverage

The dollar amount carried to cover your home and any structures attached directly to it. Ideally, the amount of coverage you carry should equal the cost of rebuilding your home after a total loss.

Other Structures Coverage

Covers other structures set apart from the dwelling on the residence premises, such as a detached garage. This coverage applies up to the limits provided in your policy and can be increased if necessary.

Personal Property Coverage

This coverage provides worldwide coverage for personal property owned or used by the insured.

Loss of Use

This coverage is available when you cannot live in your home due to a covered loss. It pays living expenses, which go over and above your normal living expenses up to the limit provided in your policy.

Liability Coverage

Liability coverage protects you in two ways. First, it provides for your legal defense against a liability claim--whether the claim is legitimate or not. Second, it will pay  court judgments against you up to the policy limit.

Medical Payments

This pays emergency medical bills for anyone injured on your property or any injury caused by a member of your family or a pet, regardless of where it happens. All bills are paid, up to your policy limit, whether or not you're legally responsible.

Homeowners policies have many other optional features available to you depending on your individual needs. These include earthquake and scheduled personal property coverage.

Additional Homeowners Insurance Coverages

Additional Living Expenses and Rental Value

When a disaster forces you to live somewhere else while your home is repaired or rebuilt, this coverage pays for your additional living expenses. It also pays for lost income from any area of your home that you regularly rent.

Personal and Legal Liability

If someone is accidentally injured or dies on or off your property, and it is caused by you, a family member or pet, this coverage pays claims against you for legal responsibility. (Does not include auto or business liability.)

Medical Payments

Your policy will cover actual medical expenses for accidental injury to others (except your household residents) caused by you, or your family members -- on your premises or elsewhere - regardless of legal liability.

Replacement Cost of Contents

Pays to replace your damaged or stolen household contents at today's retail prices, regardless of their original cost (up to your policy limits).

Valuable Items, Water Craft and Trailers

Special limits are available to cover financial loss of property, such as boats and trailers, jewelry, watches, silver and goldware, furs and guns.

Flood Damage

Although flood damage is not included in any standard homeowners policy, your insurance agent can offer you special flood insurance through one of our highly rated companies.

Taking Inventory of Your Home

No one plans to lose their valuables and other belongings in a burglary, a fire or a natural disaster. If one of these unfortunate events destroyed your home, would you be able to report exactly what you lost to the police, to the Internal Revenue Service or to your independent insurance agent?

Start Today

Write down any valuable items with their serial numbers (usually found on the bottom or back of major appliances) along with the method of acquisition (purchased, inherited or received as a gift), date purchased and price or approximate value. Attach receipts, if possible.

Remember to include furniture, appliances, carpeting, jewelry, artwork, toys and the contents of your closets, cabinets and drawers. Contact your independent insurance agent with questions or concerns.

Play It Safe With A Videotape

Videotaping each room of your house can make taking inventories easier. Photographs and a tape recorder can substitute for a video camera.

A complete video inventory should contain verbal descriptions of major assets as well as their value. Remember your garage, attic, basement and the exterior of the house, plus your landscaping and fencing. If possible, make it a family project by having everyone take turns describing the objects in your home.

Store the video or photographs along with this inventory in a safe-deposit box and send a copy to a friend or relative.

Don't Forget Important Documents

Extremely important documents should be photocopied. Keep one copy in your home and the original, where possible, in a safe-deposit box. Important items include, but are not limited to, the following:

• House - Escrow, title, deed, insurance policy.
• Personal - Birth certificates, medical history, passports, insurance certificates, credit card numbers, will.
• Automobile - Certificates of ownership, finance contracts, registrations, insurance policy, driver's licenses.
• Finance - Account numbers for checking and savings accounts, CDs, stocks, bonds, other significant investments.
• Tax - Copies of the first two pages of your state and federal returns for the past five years. Complete returns with appropriate receipts and canceled checks should be kept in a separate file box.

A Final Note

Most policies limit the amount of reimbursement for theft of valuable items, such as jewelry, furs, silverware and guns. If you have some particularly valuable items in these categories, you may need to purchase additional coverage called a "floater." These types of policies cover each item individually and are usually quite inexpensive.

This information will only be beneficial if you make use of it now. By inventorying your personal possessions ahead of time, you will save yourself from frustration should disaster strike. Your independent insurance agent can help you determine whether your property is adequately protected.

Flood Disaster Tips

Did you know...

• Floods and flash floods are the most common natural disaster, occurring in all 50 states.
• Floods cause devastating damage to buildings and personal belongings.
• One in three flood insurance claims are generated outside areas considered "flood-prone."
• Homeowners insurance does not cover flood damage.

Before a flood:

• Make a written, photographic and/or videotaped inventory of household possessions and property, and store it in a safe place (e.g., a relative's home or safe deposit box) with insurance policies, documents and other valuables.
• Take a first aid class from your local American Red Cross chapter.
• Assemble a disaster supplies kit that includes a first aid kit, canned food, non-electric can opener; bottled water (emergency managers recommend 3 gallons per person), rubber boots, rubber gloves, battery-powered radio, flashlight and extra batteries.
• Identify evacuation locations.

During a flood:

• When a warning is issued, listen to local radio and TV stations for information.
• When a watch is issued, move furniture and valuables to higher floors of your home.
• Abandon your car if stalled in rapidly rising waters and climb to higher ground.  Do not drive into any large puddles or into water that seems to be moving rapidly.

After a flood:

• Call your insurance agent as soon as possible to see if you need to file a claim.
• Make temporary repairs to prevent further damage.  Keep all receipts.
• Delay permanent repairs until your insurer approves reimbursement.
• Get any necessary construction permits from your community.
• Prepare an inventory of all damaged or destroyed personal property.  Take photos of damaged areas.
• Save remnants of damaged or destroyed property for your insurance company adjuster.
• Meet with your adjuster before signing anything with contractors, lawyers or public adjuster.
• Let your car dry out before trying to start it.

Protecting yourself is easy!

Flood insurance picks up where your homeowners insurance leaves off. It is not expensive, especially when compared with the monthly payments for disaster loans, and it's easy to get - just call your insurance agent.

What to ask your insurance agent?

• Do I have flood insurance?
• How much flood insurance should I purchase?
• How much contents coverage should I purchase?
• Do I qualify for a preferred risk policy?
  
  
  
  
  
  
  Guidelines Before Acquiring Motor Home Insurance

As much as you expend efforts to purchase your dream motor home, it is important to select an appropriate motorhome insurance policy. Legally speaking, you are required to have a certain minimum amount of coverage when you have your motor home registered. However, there are many insurance policies to ensure that your motor home obtains maximum coverage and protection. It is important to choose a policy that incorporates the recreational value of your motor home and does not treat it as another automobile. For that you need to know the basic features and benifits of motor home insurance quote.

The basic features of motorhome insurance are;

• The insurance policy is purchased and renewed annually.
• The type, size, and age of motor home, location and driving patterns influence the premium amount paid.
• Factors such as owner's age, gender, driving record and address where the home is garaged, also influences the premium amount.
• Out of pocket premium amounts may be reduced by increasing the deductible on your policy.

Look at some benifits of motorhome insurance here.

• Protection from perils such as collision, fire, and smoke, landslides, hail and windstorms.
• Coverage for emergency expense including lodging.
• Coverage for replacing your motor home and the personal belongings.
• Medical benefits in case you or someone else gets injured in the motor home.
• Full-time liability coverage.
• Roadside and towing support.

The insurance company from which you have purchased the policy should be well acquainted with handling motor homes and their accessories. Rates of motor home insurance quotes vary across states. Remember that your motor home insurance quote or policy should be different from any other automobile insurance as your motor home is a home on wheels and can cause damage of a greater magnitude in case of an accident. Ensure that your motorhome insurance policy is inclusive of any roadside assistance or towing facility in the event of a breakdown or accident. Such insurance policies rarely cover damage to personal belongings and possessions in your motor home. If you are a full time user of your motor home, opt for a policy that recognizes and offers commensurate advantage. Your insurance policy must include liability coverage i.e., indemnifying any damage to your vehicle or you. Look for possible discounts in your motorhome insurance policy. An agent will prove be a good aid in your search for a suitable insurance policy.

Insuring Sports & Recreation Vehicles

Boats, jet skis, ATVs and recreational vehicles are exciting modes of transportation. They provide a great means of escape on weekends and vacations, but ownership of these comes with some risks.

While all recreational-type vehicles can be protected by the same basic coverages, each one has its own special requirements and restrictions.

Basic Coverages

At a minimum, boats, jet skis, ATVs and recreational vehicles need "liability" and "comprehensive" insurance coverage. Liability protects you if your vehicle injures someone or damages someone else's property, and comprehensive insurance protects your property in case of vandalism, damage or destruction caused by theft or fire. Depending on the age and value of your investment, you may want to purchase collision insurance, which provides coverage for damage you cause to your own property.

Boats

The amount you pay for your boat insurance will depend on many factors including the boat's value and the value of your boating equipment, the engine's horsepower and whether it's inboard or outboard, and the length of the boat.

You may purchase additional coverages for such things as such as Fuel and Other Spillage Liability, your boat trailer, medical payments, personal effects and liability to protect you from an uninsured boater. You may be eligible to receive lower rates if you hold a captain's license or have completed safety courses provided by the U.S. Coast Guard Auxiliary or Power Squadron Courses. You may also receive discounts for having safety equipment on board or providing protective storage for your boat during non-use or off-season.

Jet Skis

The price of insuring a jet ski varies depending on its engine power and value. Your insurance costs will typically be higher for a jet ski with more than 500 cc. You also may obtain insurance to protect your trailer or to pay you for medical payments if you're in an accident.

Recreational Vehicles

You may want to purchase an auto insurance policy to cover this type of vehicle. This policy will provide you with liability, medical payments and physical damage coverage for your motorhome. Other coverages you may want to consider are:

• Replacement Cost/Purchase Price - In the event of a total loss, you will receive a new unit equal to the model, class, body type and equipment of your previous one. You will be compensated for the actual purchase price of the vehicle.
• Personal Effects - Your valuables (clothing, jewelry, etc.) may be covered against most hazards.

Other coverages you may want to discuss with your insurance agent are Towing and Labor or Emergency Expense Allocation insurance. Special rates may apply if you are more than 45 years old and have a good driving record.

A Final Note

We can provide you with more details about this special insurance and guide you in purchasing the best coverage to maximize your enjoyment and meet the insurance needs for your recreation equipment.

Auto Insurance FAQs

Q: Why is auto insurance sometimes referred to as a "packaged policy?" What are the parts of the package?

A. Before the 1950's, if a person wanted to purchase all the coverage that the modern day auto insurance policy provides, he or she would have had to purchase at least four separate policies. Changes in the laws that regulate the sale of insurance now allow the insurance industry to sell policies that combine the separate coverages into one all encompassing policy.

The main advantages of combining the various coverages are lower expenses, and therefore a lower cost to consumers, and the convenience of being able to purchase the property, automobile liability and other coverages in a single policy.

The standard private passenger automobile insurance policy can have up to four different coverages. Only the first coverage is standard - the remaining three coverages are optional.

Part A provides liability coverage that protects the insured from lawsuits arising from either the negligent operation or ownership of a covered automobile. There are two coverages provided in Part A - bodily injury liability (BIL) and property damage liability (PDL).

• BIL provides coverage for the bodily injury claims of people you negligently injure in an accident.
• PDL provides coverage for any third party property damage claims that the courts determine you are responsible to pay.

Part B provides medical payments to the policyowner and any other passengers in the car when there is an accident.

Part C provides uninsured motorist and underinsured motorist protection for the policyowner.

Both coverages are designed to compensate the injured policyowner when the negligent driver has an insufficient amount of liability insurance under his/her own policy. Typically, Part C covers only bodily injury losses, but property damage losses are included in some states.

Part D covers damages to your car when it is involved in an accident.

Q: I have an older car whose current market value is very low - do I really need to purchase automobile insurance?

A. Most states have enacted compulsory insurance laws that require drivers to have at least some automobile liability insurance, Part A. These laws were enacted to ensure that victims of automobile accidents receive compensation when their losses are caused by the actions of another individual who was negligent.

Except for the minimum liability coverages that you may be required to purchase, many people with older cars decide not to purchase any of the physical damage coverages. It is often the case that the cost of repairing the damages to an older car is greater than its value. In these cases, your insurer will usually just "total" the car and give you a check for the car's market value less the deductible.

Many people forgo the Part D coverages because of the relatively low values of their vehicles.

Q: Suppose I lend my car to a friend, is he/she covered under my automobile insurance policy?

A. Every policy is different. Check with your agent before loaning your car to anyone.

Q: What coverage does my automobile insurance policy provide me when I rent a car?

A. The answer to this question is not as easy as it once was. In the not-too-distant past, most automobile insurance policies would extend coverage to rental cars whenever you rented one. This is not quite true anymore.

In many cases, your personal automobile insurance policy may provide some coverage when you are renting a car on vacation. However, every policy is different and there may not be coverage for a rental car. Many insurance companies no longer extend personal automobile insurance coverage when you are traveling on business. The best way to find out what rental car coverage you have under your automobile policy is to contact your agent.

Q: What is the difference between collision physical damage coverage and comprehensive physical damage coverage?

A. Both collision and comprehensive are Part D coverages.

Collision is defined as losses you incur when your automobile collides with another car or object. For example, if you hit a car in a parking lot, the damages to your car will be paid under your collision coverage.

Comprehensive provides coverage for most other direct physical damage losses you could incur. For example, damage to your car from a hailstorm will be covered under your comprehensive coverage.

It is important to know the differences between the collision and comprehensive coverages for a couple of reasons.

• First, in order to make an informed purchasing decision about these optional coverages, you need to know the difference between them.
• Second, the deductibles under the collision and comprehensive coverages are often different in amount.

Q: What should I do if I have an accident?

A. The duties you need to perform after you have an accident are prescribed both by state law and by the terms of your contract. Obviously, the first thing you should do is make sure everyone is all right and call an ambulance if one is needed.

Second, for most accidents in most states, the police should be notified.

Third, you should give the other driver(s) involved in the accident your name, address, telephone number, and the name of your insurance company and/or your insurance agent. You also need to get this same information from the other driver(s).

Fourth, at the first opportunity, you should contact your agent or your insurance company to notify them that you have been involved in an accident.

Finally, there are a number of conditions in the insurance contract that you must satisfy in order to receive compensation from your insurer. For example, you need to cooperate with your insurer during any investigation undertaken during the claims settlement process. Failure to complete any of these actions can, and sometimes does, result in non-payment by your insurance company for losses that otherwise would have been covered.

Q: Why does the premium for my automobile insurance go up if I have an accident or if I get a ticket?

A. Actuaries and statisticians who have studied the claiming behavior of people involved in accidents have long known that people who have either had an accident or received a ticket recently are more likely to have another accident in the next couple of years than people whose recent driving record has been incident free.

Insurance companies use this information not to punish people who have had an accident, but to charge them the premium that most accurately reflects their likelihood of having an accident. People who are more likely to have accidents should reasonably be expected to pay higher premiums.

Q: How can I get insurance for my motorcycle?

A. Motorcycles are insured on policies specifically designed for them. Typically, motorcycles cannot be added to an automobile policy. Contact your agent for a quote.

Q: What factors can affect the cost of my auto insurance?

A. A number of factors can affect the cost of your automobile insurance - some of which you can control and some which are beyond your control. The type of car you drive, the purpose the car serves, your driving record, and where you live can all affect how much your automobile insurance will cost you.

Even your marital status can affect your cost of insurance. Statistics show that married people tend to have fewer and less costly accidents than do single people.

Q: What should I consider when purchasing auto or car insurance?

A. There are a number of factors you should consider when purchasing any product or service, and insurance is no different.

Here is a checklist of things you should consider when purchasing auto insurance.

• First, purchase the amount of liability coverage which makes sense for you.
• Second, you should decide which optional coverages you want. For example, do you want the optional physical damage coverages in Part D or is the market value of your car too low to warrant purchasing them.
• Finally, once you have decided what you want in your automobile insurance policy, you can now decide who you would like to purchase the insurance from. For example, you may decide you like the idea of purchasing insurance from a independent agent who represents many different insurance carriers.

Q: How can I lower my car insurance rates?

A. There are a number of things you can do to lower the cost of your car or auto insurance. The easiest thing to do is to shop around. It is not surprising to find quotes on automobile insurance that can vary by hundreds of dollars for the same coverage on the same car. When you shop, be careful to make sure each insurer is offering the same coverage.

Another way to lower the cost of your automobile insurance is to look for any discounts that you may qualify for. For example, many insurers will offer you a discount if you insure multiple cars under the same policy, or if you insure your home or motorcycle with them as well. Be sure to ask your agent or your company about their discount plans.

Another easy way to lower the cost of your automobile insurance is to increase the deductible. Simply raising your deductible from $250 to $500 can lower your premium sometimes by as much as five or ten percent. However, you should be careful to make sure that you have the financial resources necessary to handle the larger deductible, and that your lender will allow the higher deductible.

Car Rental Insurance

One of the most frequently asked questions about auto insurance is: Am I covered if I rent a car, and should I buy the insurance the rental company offers?

The answer is not so easily given. If you currently have an auto policy with liability limits acceptable to the rental car company, and you are renting a car for personal use, then you're probably OK as far as liability coverage goes.

If you are renting a U-haul or or other types of trucks, or if you are renting a pickup or van for business purposes, then you should probably talk to your agent because you probably will NOT have coverage under your personal auto policy. In these cases, you should purchase both the CDW and liability coverage from the rental company.

Whether or not the car itself is covered and whether you should buy the Collision Damage Waiver offered by the rental car company gets a little trickier. If you carry comprehensive and collision coverage on one of the vehicles insured on your auto policy, then this coverage may extend to the rental vehicle.

There are however, some compelling reasons to purchase the CDW from the car rental company. I could go into the reasons here, but William Wilson, the Director of Education of the Independent Insurance Agents of Tennessee, has done a great job outlining the Top 10 Reasons to Purchase the Collision Damage Waiver When Renting a Vehicle. I'd recommend reading this before renting a vehicle.

Several Final Caveats

Make sure you read the CDW you sign at the rental company. Many CDW's will only provide coverage under certain restrictions. Some common restrictions include:

Only listed drivers are covered. Make sure you tell them about everyone who may drive the vehicle, and then don't loan it out. A good rule of thumb to remember here is: "If you don't own it, you can't loan it."

Geographical restrictions: ie.- you may not covered on that long winding road that goes up between the mountains on the Big Island of Hawaii and similar dangerous passages.

Also, on your own policy, be sure to find out who is covered when renting a vehicle. Oftentimes, it is the NAMED INSURED, or a "family member" who is covered when renting a vehicle. Your resident girlfriend or boyfriend may be listed as a driver on your policy, but they probably won't have coverage for rental vehicles. The same would go for ANY resident non-family members in your household.

As always, talk to your insurance agent about it. Make sure you tell him/her exactly what type of vehicle you are renting, what it will be used for, and who will be driving it. Also, be sure to call them sooner than 1 hour before you are leaving for the airport. This can be a complicated matter, and they may need to do some quick research to give you an accurate answer.

Auto Safety Tips

Safe Drivers...

• DO wear your seatbelt.
• DO make sure everyone in the car wears a seatbelt (or sits in an appropriate child-safety seat) before you start the car.
• DO park wisely. Choose a well-lit area of a parking lot or street. And if you're in an unfamiliar area, try to stay near well-traveled streets.
• DO ignore sign language from other drivers.
• DO look into cars with airbags and anti-lock brakes.
• DO remember that speed limits are not posted arbitrarily. They're set to keep traffic moving steadily and to reduce accidents--and they're based on years of studying traffic patterns and conditions. Also, remember that accidents increase as the speed limit does.

DON'T be a lousy driver.

There are a lot of people out there setting an example, but you don't have to follow. Slow down. Back off. Use your signals. Yield. Remember the basics.

• DON'T drink and drive. DO call a cab, designate a driver, take public transportation, call a spontaneous slumber party. Just use your head.
• DON'T try to do too many things at once. Talking on a cellular phone or biting into a fully-loaded cheeseburger while you drive is flirting with disaster.
• DON'T choose a car for its aesthetic appeal alone.
• DON'T slack off on the maintenance. Letting the fluids or tires get low or letting bulbs burn out can get you in a lot of trouble.
• DON'T let the cats out of their carriers on the way to the vet. Trust us.
• DID we mention your seatbelt?

Safety isn't the first thing on a person's mind when they're looking at a sporty little roadster, but it is something to keep in mind. Generally, the larger the car, the greater protection it will provide in an accident. Check out the Highway Loss Data Institute's ratings of car makes and models at www.carsafety.org.

You're Less Likely To Have Your Car Stolen If You...

• DO always close your windows and lock the doors when you leave your vehicle.
• DO park in the garage (that is, if you have one). Cars are rarely stolen from garages, but frequently "disappear" from driveways and open spaces near homes.
• DO use your antitheft device. If you keep it turned off, it's not a deterrent, it's a waste of money.
• DO, when you park, turn your wheels toward the street until the steering wheel locks. This makes it a lot more difficult to push or tow your car away.
• DON'T leave your keys in the car while it's unattended--running or not. In fact, never leave it running if you have to step away. Even for a second.
• DON'T leave your house keys behind. If your car were stolen, you'd want to be the one that winds up with keys to your home.
• DON'T leave anything of value--a roll of $100 bills, your wallet, your trombone--in the car. You'd be amazed at what people might steal. If you must leave something, make sure it's out of sight.
• DON'T wait until you've found your parking spot to stow things out of sight. You never know who might be watching you take the extra effort to put things away.
• DON'T forget that it's just a car. If someone wants it badly enough to stop you and ask you for it--however impolitely--don't take any unnecessary risks. Cars can be replaced.

Renters Insurance

Just as most of us would not think of owning an automobile without auto insurance, renters need protection for their personal possessions and from liability. Even the smallest apartment can easily contain personal property worth thousands of dollars.

Common Renting Myths

• MYTH #1 - Insurance is too expensive. Some renters fail to insure their personal possessions because they believe insurance is too expensive, but renters insurance is typically available for as little as $100 a year.
• MYTH #2 - My landlord's insurance protects me. Many renters think they are protected under their landlord's policy. However, the property owner's insurance covers the building itself and seldom a tenant's possessions. Clarify this with your landlord before signing a lease.
• MYTH #3 - My landlord is liable if someone trips in my apartment and gets injured. Again, the owner's policy may specifically exclude liability for something that occurs within your rented residence. You could be held liable for injury to another person or damage to another person's property if the incident occurred within your rented residence.

A Look At Premiums

Renters insurance, because you are not insuring a building, is surprisingly inexpensive. Of course, like all property protection policies, the value of the property to be insured and other risk factors are weighed by the insurance company to determine your premium. As with your automobile insurance, your renters deductible is the amount you agree to pay in the event of a loss. For example, if your $2,000 stereo is stolen from your home, and you have a deductible of $250, the insurance company would pay you $1,750, which is $2,000 minus your deductible.

Coverage For All

Renters insurance offers the same general personal property coverage and liability protection as a homeowners policy. Property insurance covers the cost of repairing or replacing personal property that has been damaged, destroyed or stolen. Your property is covered both within your home and when you are traveling.

You also receive liability protection. If someone suffers an injury or damage to their property because of something you did or did not do, you could be liable. If, for example, your grandmother's oak dresser dents the walls in your apartment's lobby while you are carrying it into the building, you could be held liable. Likewise, if a fire starts in your apartment and spreads throughout the building, and you are deemed at fault, you could be held liable for damage to the entire building.

In addition, most renters policies include coverage for additional living expenses (also called "loss-of-use" coverage) if you are forced by fire or other damage to temporarily live elsewhere.

Alterations For a Better Fit

Most policies limit the amount of reimbursement for theft of valuable items, such as jewelry, furs, silverware and guns. If you have some particularly valuable items in these categories, you may need to purchase additional coverage called a "floater." These types of policies cover each item individually and are usually quite inexpensive.

Other additions to your renters insurance that add or change the policy's provisions are called endorsements. Some endorsements extend the number of risks insured against, some cover property otherwise excluded and some increase the amount the insurer will pay for a covered loss.

Also, it is important to note that the standard policy excludes damage from earthquakes and floods, so talk to your independent insurance agent about coverage for these incidents.

What It's All Worth

If your property does get damaged, destroyed or stolen, the insurance company will use one of two ways to determine its value:

• Actual Cash Value - The replacement cost of the item minus depreciation. For example, a new television set may cost $500. If your 7-year-old TV set gets damaged in a fire, the value of it might have depreciated 50%. Therefore, the amount of your coverage for that set would be $250.
• Replacement Coverage - The cost of replacing an item without deducting for depreciation. So today's cost for a TV set with features similar to the 7-year old one damaged by fire would determine the amount of compensation. If it still costs $500 today, that would be the amount of your coverage.

You can select which type of coverage you would prefer. Having replacement coverage adds only about 10% to 15% to the cost of the premium and may well be worth this slight increase.

Renting With Roommates

Usually, it is best if all roommates are on the same policy although it is possible for each to purchase his or her own coverage. If you do need to "go it alone", you alone receive the security of renters coverage.

A Final Note

At least once during a lifetime most people will rent a home. Paying rent instead of a mortgage payment does not make your personal possessions any less valuable.

Should your belongings be damaged or destroyed, or should someone suffer an injury in your home, renters insurance can offer the peace of mind of knowing that you are protected. We can help you find the best combination of coverage and price to meet your rental insurance needs.