Renters insurance is one of the most overlooked ways to protect valuables. Life insurance protects your loved ones; automobile insurance protect your car; health insurance provides for medical treatment. What does Renters Insurance do? Do you need it?

Your landlord's insurance policy covers the building in which you live. It does not cover your personal property such as furniture, clothing or household items.

Renters insurance does cover your personal property and, in some cases, will provide living expenses should your home or apartment become uninhabitable.

Special Note to Students: Dependents, such as college students, are usually covered by their parents' homeowner's insurance policy for up to 10% of the policy value. We encourage you to check with your parents' insurance agent to make certain you have this coverage.

Renters insurance, like homeowner's insurance, has choices. The most commonly purchased policy is known as the Broad Form. It covers personal property against specific hazards such as fire, theft, lightning, smoke, vandalism, explosion and water-related damage from property utilities.

The Comprehensive Form is a second choice. It usually covers more hazards than the Broad Form, including more extensive storm damage coverage. Some portions of Arkansas seem to be a tornado alley and are subject to more frequent storms than other areas. If you rent in an area like this, talk with us about the benefits of this form of renter's insurance. It may or may not be what you need.

Replacement Cost or Actual Cash Value?

Replacement Cost Coverage, as the name implies, covers the cost of replacing an item. For instance, assume you have a home entertainment center or stereo system that is destroyed by a covered hazard. Replacement Cost Coverage will reimburse you for the full value of replacing your property -- after you submit your receipts to the insurance company.

Actual Cash Value Coverage, on the other hand, will reimburse you for the cash value of your personal property at the time of the claim less your deductible. This usually results in a lower reimbursement since you may have owned the property for a number of years prior to your claim. Think about the technological advances in the computer industry. A five-year old computer has possibly lost almost all its cash value.

Additional Coverage

Insurance riders are available with Renters Insurance just like they are with Homeowner's Insurance or Life Insurance. A rider is simply additional coverage added to a policy. The most common riders for Renters Insurance include those providing additional coverage for expensive jewelry items, artwork or antiques.

At McGhee Insurance Agency, we want to provide you with information that will help you make the best choices for your life and your lifestyle. Our agents are trained to help you get the best coverage at the best possible price.