additional living expenses
additional living expenses (ale) kick in if you have to go to a hotel because your apartment is uninhabitable due to severe insured disaster damage.
Your policy will reimburse you above and beyond your normal living expenses. For example, things like restaurant meals or other essential living expenses are covered until your apartment is safe to enter after a rebuild.
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what renters insurance doesn’t cover
Most renters insurance won’t cover damage for two things:
earthquakes or floods.
In this case, you may have to pay for repairs yourself if you experience these disasters.
but there is a way to get cover.
earthquakes
earthquake insurance can be purchased separately or as an addendum to your renters policy.
floods
Flood insurance protects your apartment and helps you recover from damage caused by flooding from excessive rainfall, tidal flooding, or wind-driven storm surge, as put by New York Home Recovery.
Let’s say it’s pouring rain outside before you enter your apartment. that is considered a flood and is not covered by your insurance.
The most common flood claim is water damage or overflow from your bathroom or kitchen damaging the apartment below you. for example, if the water in your bathtub overflows.
Water damage is a very common occurrence in apartments, so you should seriously consider getting additional coverage.
One thing to keep in mind is that basic policies never cover flood damage.
You can get flood insurance from the National Flood Insurance Program (NFIP).
however, your personal belongings or the contents of your apartment are not covered. This means you must take out a second NFIP flood insurance policy. typically. you need to get coverage only to cover items capped at $100k, which is again the “normal” consensus rate.
riders
adding water damage coverage is an example of a rider.
what is a rider?
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a rider, also called a “float”. adds more coverage to a standard rental insurance policy. the clause is activated when the coverage of the standard policy ends.
Riders are typically a separate policy intended to specifically insure your most prized and expensive possessions.
Some common riders include identity theft coverage and extended valuables coverage. you’ll pay a lot more to add riders to your policy, but you’ll get a greater amount of coverage.
If you have expensive jewelry, for example, you should hire a rider to protect every valuable piece of jewelry you own in case your valuables are stolen or damaged by fire.
That way, your insurance will pay the full value of your pearl necklace.
For example, if you get mugged and your $2,000 worth of pearl necklace stolen, you won’t get the full value back if you don’t eliminate a passenger.
renters insurance will cover you up to a limit. if your limit is $1,000, say, for jewelry. you will only get that amount.
In general, remember not to rely on renters insurance to cover valuables.
Liability limits generally start at around $100,000, the common coverage that standard renters insurance allows.
which can easily be eaten by a single damaged necklace, so it’s always a good idea to take out a rider or purchase a higher level of protection to increase your liability coverage limit beyond the standard amount.
As for your deductible, choose a figure you can afford. $500 to $1,000 is the going rate for the most common deductibles.
what is a deductible?
A deductible is basically the amount of money you will have to pay when filing a claim.
If your belongings are damaged or destroyed, your deductible is the amount of money you would have to pay to replace them before insurance coverage takes over.
For renters insurance, deductibles typically range from $500 to $1,000.
If you choose a $1,000 deductible, you can potentially save about 10% on your monthly rates. And if you choose a $2,500 deductible, you can save another 10%, too.
Just note that the deductible applies only to property claims, not liability claims.
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An example is if you have a $1,000 deductible and you file a claim for $10,000 in property damage.
Your renters insurance will cover $9,000 and you will have to pay $1,000 out of pocket.
You can choose to take a high or low deductible, depending on how much you want to pay for the policy.
But don’t try to save money by getting the lowest possible deductible.
because if you choose to select a higher one, your premium price will be lower.
how renters insurance companies determine their estimate
Ever wonder what factors determine the cost of renters insurance in New York City? well, here they are:
- property value
- security measures
- credit score
- pets
- natural disasters
- neighborhood crime rates
- property value
- security measures
- credit score
- pets
- natural disasters
property value
The higher the value of your belongings, the more expensive it will be to insure your personal property. if you live in billionaires row and collect important works of art, you will pay more for your insurance than if you live in a studio on bruckner boulevard next to a kfc and the most expensive thing you own is your mattress on the floor.
security measures
Tenants who have security features like alarm systems, smoke detectors, deadbolt locks, and other security features in their apartment will pay less for their insurance due to less chance of vandalism or theft.
credit score
Renters insurance is often more expensive for people with low credit scores.
Keep in mind that renters insurance companies check your credit score when they give you a quote.
but it’s a “soft pull,” meaning it’s an inquiry that won’t affect your credit score. conversely, a “hard pull” will affect your fico score.
pets
If your dog, Cate Blanchett, bites someone inside or outside your unit, your liability portion of your insurance will cover the medical bills.
however, if you have an aggressive breed of dog, such as a wolf hybrid, pit bull or rottweiler, this will increase your renters insurance rate, as your company may have to pay the costs if that person sues you, for instance.
You should always check the fine print. some policies will not cover an “aggressive” dog.
natural disasters
If you live in areas prone to hurricanes, earthquakes, wildfires, and other natural hazards, your rates will be higher.
neighborhood crime rates
If you live in an area known for its crime rates or an area with a long history of theft, your quote will be very high.
This is the monthly cost of a $500 deductible and a $1,000 deductible from insurance companies serving New York City.
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