Renters insurance is designed to protect you from loss of your personal property because of theft, vandalism or natural disaster. You need it because your landlord's policy covers the building itself, but not any of your possessions. A renter's policy will cover your TV only if it was damaged because of one of the perils listed in your policy.
Depending upon what caused the damage, renter's policies repair or provide cash for replacing your property such as TVs and other electronics, clothes, jewelry and furniture. They also may pay medical bills and legal bills if someone, other than you or your roommate, is injured. For example, if lightning damaged the TV's wiring and your friend is shocked turning the TV on, renter's insurance could cover his doctor's bill.
When you buy renter's insurance, your contract with the insurance company lists the types of perils it will cover. Although policies vary slightly, typically these perils include theft or vandalism and some disasters. For example, most policies specify that they will cover damage from fire or lightning; ice, snow and sleet; explosion; vehicles; windstorm and hail; torn or broken HVAC systems or plumbing problems; falling objects; civil unrest; vandalism or other mischief, and theft. Some policies also will cover damage from short-circuited appliances. Flood and earthquake damage typically is not covered in a renter's insurance policy, although you can obtain this coverage through special policies.
If your TV was totaled or damaged because of a covered peril, the insurance company will determine how much to pay you. Policies typically have a deductible, which is the portion of a loss that you must pay first before the insurance company issues you a check. The deductible will be listed on your policy, but often is $500 or $1,000. If your TV is the only item damaged, insurance will pay you only if the TV is valued at more than your deductible.
Replacement or Actual Value
The insurance company will determine the value of your TV according to the type of coverage you bought. Actual value is the value less the depreciation; for example, your five-year old TV now is worth less than you paid for it. Replacement value is the amount you need to replace the TV with a comparable one today. Premiums on policies with replacement value are typically higher than those with actual value, but they provide the means to actually replace the property.
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