If you’re looking for renters insurance anywhere in America, you’re probably wondering one thing before you buy a policy: How much coverage do I need in 2016? It’s a great question and it’s one that’s dependent on your lifestyle as well as other factors.
Your state and their regulations matter, of course. So does case law. An example of that would be if you have Erie, PA Renters Insurance.
Why Erie, PA? In Pennsylvania, there is another class of persons who could get access to the funds from your personal property claim! PA interprets “insurable interest” widely, and includes anyone who reasonably expects to benefit from preserving or replacing the property.
Conceivably, this could include a separated, but not yet divorced, former spouse who “expects” to take all of your furniture in the divorce. That person arguably could have an interest in replacing the furniture with new, given replacement cost coverage!
These concerns are in no way limited to the Keystone State, of course. Every state has unique regulations and case law that govern the payment of insurance claims. Those regulations may be especially stringent if you have too little coverage and it needs to be paid proportionally.
How Much Coverage Do I Need In 2016 For Personal Property?
To start with, the good news is that many renters insurance policies automatically make a small adjustment to account for inflation at renewal.
You’ll see a slight increase in your property coverage on your renewal declarations page. That’s because most people don’t make adjustments for inflation, because the number is so small.
So how much coverage do you need in 2016 on your renters insurance?
There’s only one way to tell. Add up the value of all of your personal property. There are a variety of home inventory options available to do this, and pictures are always a good idea.
They make claims easier as well, should it come to that. Chances are very good that once you’ve added up the clothes, furniture, miscellaneous things in the kitchen, things stuffed in cabinets, and closets full of stuff… You’ll be surprised at the total.
If the total is right around where you expected, either you’ve been keeping after your policy quite well or you’ve made a serious mistake in calculating how much coverage you need.
Have you been assigning “yard sale” values, or actual cash value, to your stuff? If so, go back to the list and figure out what it would cost you to replace each item.
Fortunately, that’s easy to do with the availability of the internet. Just Google whatever the item is, and that will give you a good idea of the replacement cost. Your policy likely pays replacement cost coverage, so that’s the amount you should use when figuring out how much coverage you need.
Your loss of use coverage is a function of how much personal property coverage you have. It will increase when you increase Coverage C. This is what pays for your additional living expenses, and the idea is to allow you to maintain your life as close as possible to what you’re accustomed to. So it only makes sense that it should increase with property coverage.
Now go walk around your home or apartment and figure out what you forgot to add in. Chances are strong that there’s something you’ve forgotten. Have you scheduled expensive jewelry?
That’s important, if you’d like for it to be covered! Have you tallied up the sports equipment your kids have shoved in the garage? Did you value that antique dresser, but forget to open the drawers and value the contents?
The total of all of that is how much coverage you need.
Easy, just like we promised.
How Much Coverage Do I Need In 2016 For Liability?
Liability coverage is what protects you if you’re sued because someone thinks that your negligence caused them to suffer bodily injury or property damage.
There’s the rub: if someone thinks… Liability doesn’t just cover you if the claim is legitimate and gets paid. There’s a long road to get to that point.
Often, that road is the tortuous road of a lawsuit. You can’t afford to defend against something that could take years to work its way through the system. That’s why your renters insurance offers defense coverage for claims that the policy would pay, once proven.
The insurance company will pay for your counsel, but the lawyer has a duty to you as the client – not to the insurance company. Many states have strong protections to ensure this.
Some states have held that the attorney absolutely may not break confidentiality to tell the insurance company, even if you reveal something to them that’s detrimental to the insurance company’s case because you are the client and they owe their duty to you even though the insurance company is paying the bills.
The company’s duty to defend generally lasts only until the policy limits have been exhausted. So how much liability coverage do you need?
There is value in making sure that defense coverage continues because the policy limits are not exhausted. More importantly, there is value in preventing a situation where limits are exhausted but the judgement hasn’t been fully paid.
Bodily injury suits are quite common, and they often ask for amounts in the millions of dollars. While they’re unlikely to get such an award, the mere request is enough to give one pause. One hundred thousand dollars doesn’t seem like much coverage in that light.
As a result, you should have as much liability coverage on your renters insurance as you can get. Perhaps you can’t think of a reason to sue you, but it’s a guarantee that someone else can! America is about both freedom and responsibility – We have the freedom, and we’re responsible to insure properly because the ability to sue for anything at all is also part of that freedom.
Defense coverage under the policy applies even if the suit is frivolous. Since most of us don’t have lawyers on speed dial to protect us from people suing for something ridiculous, there is additional value here. That’s especially important in a state like PA, where there are some loopholes around appraising significant property damage.
If you have Erie, PA Renters Insurance, and you cause property damage to someone else, the damage will need to be appraised if it goes to litigation.
If a payment is awarded based on that appraisal, it can be set aside in two ways. Obviously if the appraiser or the person suffering damages committed fraud, the award would be set aside.
However, in Pennsylvania, appraisal awards already authorized by a court may be set aside in cases where the appraiser merely exceeded the scope of his rather limited authority. If you’re the one being sued for the property damage, this is a crucial point.
It’s also a point that may be of significant help to your case. You have no reason at all to know the above information offhand, but the defense counsel funded by your insurer would know it and use it to help your case if possible.
Increasing your liability coverage generally makes only a minimal difference in the cost of your policy. Realistically, how much coverage do you need for liability? What does your company offer?
That’s probably the number you want, because sooner or later someone will sue you for something. Whether or not the suit is valid, you’ll need a defense and you’ll need the insurance there to pay for it if necessary!
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.
Effective Coverage offers friendly insurance experts for renters who can help you to understand coverage levels and how they benefit you. You can call, or just click above if you prefer to see the numbers online. Either way, it’s quick and easy!
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