When comparing quotes for renters insurance, you need to know the difference between actual cash value and replacement cost policies. Although the two types of coverage will protect your belongings in the event of fire, theft or a natural disaster, there are distinct differences. Make sure to educate yourself about both types of plans before you choose one or the other. In addition to the cost of the policies, the amount of coverage will also need to be compared.
Actual cash value is the cheaper of the two types of protection. If you decide to purchase this type of insurance, it will pay you what your items are actually worth, or the actual cash value, at the time of the loss. This means, if you have a lot of older possessions, you will not be able to get much money when you make a claim. Probably not even enough to replace half of your items. On the other hand, if you choose replacement cost policies, you will be able to make a claim for what it will actually cost to replace the items you lost. If you own expensive electronics, game systems and high end appliances, this is probably the type of coverage you need.
Compare rates from several companies before choosing the renters insurance policy you need. Many times you can find an affordable replacement cost policy that does not cost much more than an actual cash value plan. If you ever find yourself in a situation where you need to make a claim, you will be glad that you went with more protection. No one wants to think about a disaster or theft affecting their home, but knowing you have great insurance will make the situation easier to handle.