Renters' Insurance Rights
If you rent an apartment, house or condo, your insurance agent probably encourages you to buy renters' insurance. As you ponder whether or not the coverage is worth the expense, you may wonder what, exactly, the policy provides for you and what your rights are as a policyholder. Renters' insurance tends to offer a lot of protection for relatively low premiums.
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Unfair Claims Laws
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Renters' insurance customers are protected by the same state laws as customers of other insurance types. Each state has its own set of laws that define what insurers are permitted and forbidden to do when they handle claims. One common example of the rights you have with a renters' policy is the right to prompt claims handling. Your insurer is not permitted to unreasonably delay the processing of your claim after you notify it that you've had a loss. If you feel your insurer is acting unlawfully, you can contact your state's department of insurance for assistance.
Legal Protection
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Renters' insurance comes with personal liability coverage. You can often buy higher limits for this coverage above what comes included with the policy. The liability section pays for losses like guests' injuries when they are at your home. Additionally, if you cause injury outside your home, or damage someone else's property, the liability portion of your renters' plan should provide payment, subject to your policy's exclusions. This coverage also pays for the costs of providing legal defense for you, if necessary.
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Compensation
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Renters' insurance gives you the right to receive compensation for your belongings if they are stolen or damaged by a covered cause of loss. Basic renters' policies pay a cash settlement for damaged items based on their value at the time of loss, considering their condition and depreciation. If you purchase a replacement cost endorsement, the insurer will not deduct depreciation from the settlement, and you will receive enough money to replace the damaged items with new ones, regardless of market value. Both types of settlement are limited by the amount of coverage you purchase for the policy.
Exclusions
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Equally important to understanding your rights is knowing about the rights that a renters' insurance policy doesn't afford. You generally do not have the right to collect a settlement from your landlord if your belongings get damaged, unless the damage is a direct result of landlord negligence. You also cannot ask your insurer to pay for the cost of suing your landlord for any reason. If your losses exceed the dollar amount stated on your policy, you cannot ask your insurer to pay more than the maximum coverage amount you purchased. Check your policy for a full list of exclusions.
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References
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