Renters insurance is usually pretty cheap and it can save you a ton of money if disaster strikes. However, before you sign up you should ask your insurance agent about exclusions and limits. Here are a few common exclusions and limits to watch out for.
Wait a minute– what’s an exclusion? What’s a limit?
Exclusions are scenarios in which the insurance company doesn’t have to pay you money. Similarly, a limit is a cap on the maximum amount the insurance company will pay. Insurance companies add exclusions and limits to renters insurance policy agreements in order to limit risk to the company.
By default, most basic home renters insurance policy plans will pay for about N500,000 worth of jewelry in the event that someone steals it or it gets lost or damaged during a disaster. Five hundred grand may seem like a lot of cash, but it may not cover everything. It’s a good idea to find out the exact value of your jewelry and pay for extra coverage if the basic coverage isn’t enough.
Most renters insurance policy plans don’t cover art at all. If you own valuable art, definitely get it appraised so that you know exactly how much it costs. Once you get the details, contact your insurance company and ask if you can attach a rider that will cover the cost if something happens to your valuable art.
- Damage resulting from sewage or drain backups
Believe it or not, most standard renters insurance policy plans will not give you money to replace your stuff in the event that your valuables get damaged because of drain water or sewage water. Check with your landlord and ask if your building or home has ever had issues with the sewage system. If so, get a rider attached to your renters insurance policy that will cover you.
- Electronics and computer equipment
Some insurance companies are tricky when it comes to electronics and computers. New technologies are constantly making old ones obsolete. As a result, your favorite electronic gear may be worth less than you think. If there is any question in your mind about what your plan does or does not cover, check with your agent to make sure that you can get fully compensated in the event of a loss.
If you collect stuff, first of all get a professional to estimate how much your collection is really worth. Be sure to take pictures of everything, too– the more proof you have after a disaster, the better. Once you have the numbers together, check and make sure that your insurance company covers the full value of the estimate– or at least something close to it. Most default renters insurance policy agreements don’t offer much in the way of collectible coverage.