Unexpected financial losses can affect your financial future. One way to manage this risk is to buy insurance. Renter's insurance is a necessity when renting a home or business location. The building owner may have insurance, but that will protect only the building. The renter's personal belongings are not protected. A renter should carefully evaluate personal belongings to determine the amount of insurance coverage needed. Renters insurance should also provide liability protection for lawsuits or medical payments from injuries on your premises. You should also be sure the policy covers living expenses in case you have to relocate while damages are being repaired. In the case of a business, some renter's insurance provides compensation for the interruption in business due to the accident or emergency The amount reimbursed after a loss depends on the type of coverage. An actual cash value policy pays the price that the item's value is today regardless of the purchase price. For example, a five-year-old camera would be covered for the value after five years of use. It would not be covered for the original purchase price. A replacement cost policy pays the amount that it would cost to replace the item today. Most insurance policies The amount reimbursed after a loss depends on the type of coverage. An actual cash value policy pays the price that the item's value is today regardless of the purchase price. For example, a five-year-old camera would be covered for the value after five years of use. It would not be covered for the original purchase price. A replacement cost policy pays the amount that it would cost to replace the item today. Most insurance policies have a deductible. A deductible is the amount that the insured pays out of pocket before the insurance coverage begins. Activities Amy Tanner purchased renter's insurance with the following coverage: $100,000 liability for lawsuits and medical; $20,000 replacement cost for personal property, $500 deductible. One night, Amy left a candle burning that ended up causing a fire and destroying all of her personal belongings. The original cost of the belongings was $32,000 1. How much did the insurance company pay for this claim? 2. How much did Amy pay to replace the personal property? 3. Explain the impact if Amy would have had an actual cash value policy instead of a replacement cost policy Unexpected financial losses can affect your financial future. One way to manage this risk is to buy insurance. Renter's insurance is a necessity when renting a home or business location. The building owner may have insurance, but that will protect only the building. The renter's personal belongings are not protected. A renter should carefully evaluate personal belongings to determine the amount of insurance coverage needed. Renters insurance should also provide liability protection for lawsuits or medical payments from injuries on your premises. You should also be sure the policy covers living expenses in case you have to relocate while damages are being repaired. In the case of a business, some renter's insurance provides compensation for the interruption in business due to the accident or emergency The amount reimbursed after a loss depends on the type of coverage. An actual cash value policy pays the price that the item's value is today regardless of the purchase price. For example, a five-year-old camera would be covered for the value after five years of use. It would not be covered for the original purchase price. A replacement cost policy pays the amount that it would cost to replace the item today. Most insurance policies The amount reimbursed after a loss depends on the type of coverage. An actual cash value policy pays the price that the item's value is today regardless of the purchase price. For example, a five-year-old camera would be covered for the value after five years of use. It would not be covered for the original purchase price. A replacement cost policy pays the amount that it would cost to replace the item today. Most insurance policies have a deductible. A deductible is the amount that the insured pays out of pocket before the insurance coverage begins. Activities Amy Tanner purchased renter's insurance with the following coverage: $100,000 liability for lawsuits and medical; $20,000 replacement cost for personal property, $500 deductible. One night, Amy left a candle burning that ended up causing a fire and destroying all of her personal belongings. The original cost of the belongings was $32,000 1. How much did the insurance company pay for this claim? 2. How much did Amy pay to replace the personal property? 3. Explain the impact if Amy would have had an actual cash value policy instead of a replacement cost policy