Renter's Insurance
Not what you're looking for?
We Rent, So Why Do We Need Insurance?
"Have you been down in the basement?" Nathan asked his wife, Erin, as he entered their apartment. "No, what's up?" responded Erin. "It's flooded because of all that rain we got last weekend!" he exclaimed. "Oh no! We have the extra furniture my mom gave us stored down there. Is everything ruined?" Erin asked. "The couch and coffee table are in a foot of water; the loveseat was the only thing that looked OK. Boy, I didn't realize the basement of this building wasn't waterproof. I'm going to call our landlady to complain."
As Erin thought about the situation, she remembered that when they moved in last fall, Kathy, their landlady, had informed them that her insurance policy covered the building but not the property belonging to each tenant. Because of this, they had purchased renter's insurance. "Nathan, I think our renter's insurance will cover the damage. Let me give our agent a call."
When Erin and Nathan purchased their insurance, they had to decide whether they wanted to be insured for cash value or for replacement costs. Replacement was more expensive, but it meant they would collect enough to go out and buy new household items at today's process. If they had opted for cash value, the couch Erin's mother had paid $1000 for five years ago would be worth less than $500 today.
Erin made the call and found out their insurance did cover the furniture in the basement, and at replacement value after they paid the deductible. The $300 they had invested in renter's insurance last year was well worth it!
Not every renter has as much foresight as Erin and Nathan. Fewer than 4 in 10 renters have renter's insurance. Some aren't even aware the need it. They may assume they are covered by the landlord's insurance, but they aren't. This mistake can be costly.
Think about how much you have invested in your possessions and how much it would cost to replace them. Start with your stereo equipment or the television and DVD player that you bought last year. Experts suggest that people who rent start thinking about these things as soon as they move into their first apartment. Your policy should cover your personal belongings and provide funds for living expenses if you are disposed by a fire or other disaster.
Questions:
1. Why is it important for people who rent to have insurance?
2. Does the building owner's property insurance ever cover the tenant's personal property?
3. What is the difference between cash value and replacement value?
4. When shopping for renter's insurance, what coverage features should you look for?
Purchase this Solution
Solution Summary
The answer to this problem explains Case Scenario related to renter's insurance. The references related to the answer are also included.
Solution Preview
1. It is important for those who rent to have insurance because the insurance by the landlord covers the building but not the property belonging to each tenant. Now those who rent, invest considerable money in their personal belongings and it would cost a lot to replace them. For example, the stereo equipment or the new television and DVD player that the persons bought last year cost a lot of money. Renter's insurance informs the tenant that the landlord is not responsible for their belongings and that the tenant has coverage ...
Education
- BSc , University of Calcutta
- MBA, Eastern Institute for Integrated Learning in Management
Recent Feedback
- "I read your comments, and thank you for this feedback. Do I need to find other studies that applied this methodology Ive used? That's where I'm stuck at."
- "Thank you kindly sir. "
- "Excellent and well explained. --Thank you kindly. "
- "Awesome notes. I appreciate you."
- "I have the follow-up project and I will assign that to you very soon. "
Purchase this Solution
Free BrainMass Quizzes
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce
Business Ethics Awareness Strategy
This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.
Operations Management
This quiz tests a student's knowledge about Operations Management
Motivation
This tests some key elements of major motivation theories.
Learning Lean
This quiz will help you understand the basic concepts of Lean.