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 extra furniture my mom gave us stood 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 okay.Boy, I didn't realize ithe 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 then that her insurance policy covered the building but not property belonging to each tenant . Because of this they had purchased reenter's insurance "nathan ,i think our reenter'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 buy new household items at today's prices. if they had opted for cash value, the couch erin's mother had paid$1000 for five years ago would be less worth then $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 had invested in the renters insurance last year was well worth it!

not every renter has as much you have as much foresight as Erin and Nathan . Fewer than 4 in 10 reenters have tenant's insurance . Some aren't even aware they 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 much it would cost to replace them Start with your computer , television and any precious item that you have . Experts suggest that people who rent start thinking about these things as soon as they move into first apartment . your policy should cover your personal belongings and provide funds for living expenses if you are disappointed 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 cash value and replacement value ?

4 when shopping for reenter's insurance , what coverage features should you look for?