It is important you understand precisely how you get compensated. It depends on the following two very critical issues:
- Type of coverage you have
- Type of loss you incur
When you take the tenant insurance cover you could either go for the replacement cost coverage or the precise cash value coverage. You will, therefore, receive different amounts of compensation depending on which coverage you decided to go for. I would, however, recommend that you always go for the replacement cost coverage to ensure you always get enough to purchase the lost property at its current value.
Other items like collectibles and jewelry may require you to purchase additional insurance coverage. This is because a tenant insurance cover may not be able to cover it fully. You will incur an extra expense, known as a deductible and is considered out of pocket.