What Exactly Is Renters Insurance?
Renters insurance is a type of insurance that is tailored specifically to the needs of tenants.
Renters cannot rely on their landlord's insurance, which only covers the structure and not your belongings. If a fire, tornado, or other disaster ripped through the building, you'd have to pay to replace all of your belongings if you didn't have renters insurance.
Renters insurance protects not only your personal belongings, but also your liability and additional living expenses. Furthermore, coverage for guest medical payments can pay out for minor injuries to guests (up to $1,000) regardless of who is at fault. While renters frequently focus on insuring their belongings, these other types of coverage can be just as beneficial.
How to Find the Most Appropriate Renters Insurance
- Obtaining renters insurance is a straightforward process:
- Understand what renters insurance covers (and what it does not).
- Determine the amount of renters insurance you require.
- Renters insurance quotes should be compared.
- Fill out an application for the job at the company of your choice.
What Is Covered by Renters Insurance?
The following are the primary types of coverage included in a standard renters insurance policy.
Personal property insurance
This type of coverage protects your personal belongings, such as furniture, jewellery, rugs, clothing, dishes, pots and pans, electronics, and other items. It protects against theft, fire, smoke, vandalism, falling objects, explosions, and the weight of snow and ice.
You'll choose a personal property policy limit, which is the maximum amount your insurance company will pay if your personal belongings are damaged or stolen. For example, you could select $30,000 in coverage.
In most cases, you'll be able to choose between replacement cost coverage and actual cash value coverage (ACV). Replacement cost coverage is more expensive, but it provides better coverage because it does not account for depreciation. For example, if you paid $2,000 for a laptop three years ago and it was stolen, the replacement cost would cover the cost of replacing the laptop at today's retail prices (minus a deductible). ACV would only pay the laptop's depreciated value.
For certain types of losses, some items have "special limits" or sub-limits. For example, a policy may limit coverage for stolen jewellery to $1,000. That would be insufficient for a $5,000 ring, for example.
If you require additional coverage for high-value items, you can "schedule" them so that you are paid the full value if they are stolen.
Insurance against liability
Many people only consider renters insurance in terms of property coverage, such as furniture. However, renters insurance provides important liability protection. When you are sued for someone else's injuries or property damage, your liability insurance kicks in. This coverage also includes legal defence.
So, if someone falls in your apartment or your dog bites someone and you are sued, you can use your renters liability insurance to defend yourself.
A typical liability coverage amount within a renters insurance policy is $100,000, but you can increase that amount for the best renters insurance.
Other people's medical expenses
Medical payments coverage is commonly included in renters insurance policies and pays for minor medical bills regardless of who is at fault. For example, if a visitor slips in your home and sustains a minor injury, this policy may pay out regardless of fault. The coverage amounts are small and typically begin at $1,000.
Extra living expenses
If you are unable to live in your apartment due to a covered problem, additional living expenses coverage can pay for hotel bills, restaurant meals, and other extra costs, such as pet boarding fees. Remember to keep all of your receipts in case you need to file a claim.
This is also known as "loss of use" coverage.
What Doesn't Renters Insurance Cover?
Renters insurance does not cover the physical structure in which you live. The landlord's insurance covers the structure of the building as well as common areas such as hallways.
In addition, renters insurance typically does not cover incidents that occur in common areas. For example, if a guest slips on an icy sidewalk, the landlord's liability insurance would cover the incident.
A typical renters insurance policy will not cover your roommate's belongings, vehicle damage or theft, or damage caused by insects or pets.
Flood, earthquake, and mudslide coverage are typically excluded, but can be purchased through additional policies.