At Effective Coverage, we live by our core values. As part of that mission, we focus on offering education and information about renters insurance to everyone.
The vast majority of Americans do not read their renters insurance policy (or any other policy), and many have attributed that problem to the lack of personal responsibility that’s so prevalent in our country today. Is that the real reason no one understands Coverage A on renters insurance? Find out below our Video Guide to Texas Renters Insurance!
Blaming the folks who haven’t read their Irving, TX Renters Insurance policy and crowing about personal responsibility is wrong. Most Americans haven’t read their insurance policy because it’s overwhelming, challenging to read, and they don’t know where to start.
For many years, insurance agents nationwide have done a fantastic job of explaining coverage to their clients. That’s all well and good, but the fact that people don’t know what’s in their policies is largely because no one went over it with them and broke it down into its simple component parts.
As an insured, you have an absolute responsibility to know what’s in your insurance policy. You are responsible to know that information no matter what you were told and no matter what’s on your evidence of insurance document. That document neither negatively nor affirmatively amends the policy or the coverage, and scrivener’s errors on an evidence of insurance cannot bind coverage that isn’t in the policy.
That’s why we continually offer and update information about renters insurance policies. You’re responsible to understand what’s covered, but that’s much easier to do when you have a general idea what to expect from each component part of your policy. When you know what to expect, you avoid disappointment and misunderstandings. Knowing what to expect from various parts of your policy also means that you’ll be better able to evaluate any additional coverage that you might need based on your individual belongings, exposures, and situation.
A renters insurance policy is generally divided into six main types of coverage. Over the following few days, we’ll look at each of them. They’re labelled logically enough, like this:
- Renters Insurance Coverage A – Dwelling
- Renters Insurance Coverage B – Other Structures
- Renters Insurance Coverage C – Personal Property
- Renters Insurance Coverage D – Additional Living Expenses
- Renters Insurance Coverage E – Liability
- Renters Insurance Coverage F – Medical Payments To Others
Today, we’ll take a look at Coverage A, dwelling coverage, what it does, and how it impacts your renters insurance policy. By understanding Coverage A, B, C, D, E, and F you’ll be able to read your policy and know how the coverage applies to you. Keep an eye out in the next few days for the rest of the articles, and scroll down to learn more about renters insurance Coverage A.
What Is Coverage A?
Coverage A on renters insurance is something you’ll likely see on your declarations page. You’ll see something specific in the “amount” section next to it, but we’ll get to that in a moment. Coverage A is dwelling coverage. It protects the structure of the dwelling from losses caused by fire and other perils, often including wind.
It’s based on the replacement cost of the dwelling, not the market price. The replacement cost is what it would cost to rebuild the structure from the ground up on a cleared lot in the event of a total loss. This rarely tracks with the market price, which is what people will pay and includes the land.
If the dwelling is relatively recent construction, the replacement cost is often less than what is paid for the dwelling because you already have the land and it’s just the price of rebuilding. For certain much older homes such as Victorians, the replacement cost is calculated differently and may be significantly higher than you expect. So how could that possibly be relevant to your Irving, TX Renters Insurance?
Wait, Doesn’t The Landlord Take Care Of Covering The Dwelling Or Structure?
If you have your renters insurance declarations available, take a quick look at them. The declarations page (which might actually be several pages) is what tells you how much coverage you have for each part of the policy. If you’re looking at your renters insurance policy, you’ll see a zero, “nil”, or another indicator that there is no coverage at all provided by the policy for renters insurance Coverage A.
That’s because insuring the dwelling for Coverage A is not your problem. You don’t need to protect the structure against “whatever happens to it.” The only time you’re responsible for the building itself is if you cause the damage, and there’s a different type of coverage for that. Coverage A isn’t something you need, and that’s reflected by the indicator of no amount of coverage, as well as the fact that there’s nothing indicating that you’re being charged for it.
So Why Is Coverage A On My Renters Insurance Policy?
Renters insurance Coverage A is there because of the way the policy form was created. Originally, there was “fire insurance” which covered just that – fire. Eventually, additional types of insurance were added and it developed into a homeowners policy.
That homeowners policy was standardized onto the HO-3 policy form written and updated regularly by the Insurance Services Office and used by most companies in most states. In Texas, you’ll also find the HO-B homeowners policy form once in a while.
From the homeowners HO-3 policy, the renters insurance policy was developed and designated the HO-4. Again, in Texas you’ll sometimes run across the HO-BT (T for “tenant), but most companies nationwide will use the HO-4 for renters. This is the reason that your renters insurance declarations says “Homeowners” because the policy form is substantially similar.
The primary difference between the homeowners and renters policy is that on a renters insurance policy, you’re not paying for or receiving Coverage A or Coverage B, because those are not things for which you are responsible. That’s why it indicates there’s no coverage for them on your declarations, and that’s why you’re not charged for them.
If you’re curious, Coverage B is “other structures.” It’s designed to protect additional buildings on the premises, and it’s also not something you need. If the detached garage burns down, that’s not your problem unless you were responsible for the fire.
Insurance policies look like they do because of the way they’ve evolved over time. When one policy leads into another type of policy, there are many things that are carried over or written into the policy. The only things that you are covered for are things that show on your declarations page with a limit of coverage or a price for the coverage. You’ll see neither. The good news is, now that you’ve read up on what renters insurance Coverage A is, you know you don’t need to worry about it!
The national average price of renters insurance is just $187.00, according to the III. That works out to as little as fifteen dollars per month. The vast majority of families can budget renters insurance easily at those prices.
Additionally, it's important to note that renters are at a significantly higher risk of experiencing loss than homeowners. Renters occupy roughly one third of total housing stock in the country, and yet they are fully fifty percent more likely to experience theft than homeowners, according to the Bureau of Justice Statistics.
It only costs a few dollars a month to protect your family, and this cheap renters insurance is a great way to mitigate the additional risks that come with being a renter.
To find out more about your renters insurance policy or to get covered quickly, just call (800)892-4308 or click to get covered - whether you need Irving, TX renters insurance quotes online or coverage anywhere else!
Effective Coverage offers the nation's only completely mobile platform to quote and purchase renters insurance right from your phone or tablet in just one minute. Get an online renters insurance quote today and protect your family.
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- Do You Need Some Time Alone With Your Thoughts? We understand, which is why we created the Texas Guide To Renters Insurance.
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