Last Updated on Wednesday, September 1, 2021 by ProsCons
We can refer to Renters insurance as tenants insurance as well. It is a type of property insurance that protects the policy holder’s belongings from various perils like theft, fire, & various other liability claims that will occur. The renters’ insurance protects the tenant & not the house owner in time of need. The foremost advantageous points of renters insurance are that the tenant’s personal properties are well covered & that the insurer also pays for the expenses if the dwelling becomes inhabitable. In short here are some pros & cons of renters insurance.
Pros of renters insurance:
- Renters insurance covers every belonging of the tenant. Hence, the insurance coverage will replace everything. There is also a provision for selecting between full replacement and actual cash value. So, everything will be as per the agreement within the insurance policy. Thus it ensures total security for the insured properties.
- Under the renter’s insurance policy, the insured is additionally covered from any legal claims for bodily injury or property damage done by the tenant, their household, or their pets. In this case, the policy also covers legal charges incurred till the limit of the policy chosen. Thus allowing the third party to directly submit the medical charges to the insurance firm.
- Renters insurance also provides coverage for the tenant in case of any insured disaster which can render the present location inhabitable. The insurance policy covers all the expenses incurred by the tenant. And, they also renovate or build the damaged properties. However, there is also some type of limit to the expenses covered by the policy.
- This policy also covers medical insurance up to a limit for the third party injured while on the insured property. Similarly, the insurance company can not cover the voluntary damages or whatsoever.
Cons of renters insurance:
- As with any other insurance policy, the main downsides of renters insurance are its payments. The increase in the additional clauses on the agreement keeps the cost high. Thus one should be aware of the loopholes in the agreement & take decisions rationally.
- Renter’s insurance policy can also undervalue our possessions. Given the valuation, it may also turn into a complete waste of our money if the full value appraised is lower than the price for his\her replacements.
- The insurance claim process can also be lengthy. Given the situation, the evaluation of the damage done can be a time-consuming one. In the worst-case scenario, the insurance company can outright deny the claim or delay the payment for the claim.
- Another downside of it is that the insurance coverage is not transferrable in any way. So, the tenant should renew the insurance policy as he/she decides to relocate to the new location. In conclusion, it’s a waste of money if the purchased policy becomes invalid.
Renters insurance will protect our belongings from all kinds of risks & it is an essential thing if we have something that is of immeasurable value to us. However, it becomes a meaningless expense if we are always on the move due to various reasons. In conclusion, the renters’ insurance should be purchased with the long-term view while weighing its merits & demerits, the tenant should pre-plan to benefit from it.