While your landlord most likely has insurance coverage for the building you live in, he does not have coverage for your belongings. Having renter’s insurance provides you with insurance coverage to help you get back on your feet after a burglar steals your belongings, a fire destroys everything in your apartment or other setbacks that you might experience. This coverage does not cost a lot of money and provides you with peace of mind.
Renters insurance can provide protection for your personal property, such as furniture, clothing, electronics, jewelry and most other belongings that you brought into your apartment. It will also provide you coverage if a claim is made against you or you are sued. Your rental insurance policy will provide you with personal liability coverage that can help with associated legal costs and financial protection against accidental bodily injury or property damage to others. This insurance will provide coverage at your home or away from it, even if it is another part the world. You will be protected for losses resulting from fire, lightning, hail, explosions, smoke and vandalism. Your renters insurance will also protect your property against many types theft.
Rental coverage provides:
- Personal Property Coverage – insurance coverage that protects the belongings that you have brought into your home. This coverage can be purchased as either as Replacement Cost or Actual Cash Value (ACV). The Replacement Cost Rider will cost you a little added premium but will replace the item you lost with a like kind and quality item. ACV will depreciate your belonging due to age and wear and tear then pay you cash, which you probably will not be able to fully replace the item without adding extra money for the purchase. The Replacement Cost Rider is well worth the little extra premium especially when you are unable to replace your belonging.
- Example: You are away from home and you have your iPad stolen from your hotel room. If you have Replacement Cost on your renter’s policy, you will get a new iPad of like kind and quality. Whereas if you have Actual Cash Value, you will have a deductible on your insurance policy and the insurance company will depreciate your iPad due to age and usage. The cash you receive probably will not be enough to replace the iPad.
- Renters Liability Coverage – insurance coverage in the event a claim is made against you or you are sued as a result of a covered event. Your insurance will help cover associated legal costs and related damages. Most renter’s policies provide $100,000 (policy minimum) protection against financial loss due to liability claims brought on by others for accidental bodily injury or damage to their property. These occurrences can happen while in your apartment, caused by you during your personal activities, or caused by your children or pets. Higher limits of liability can be purchased for an extra premium.
- Example: Your neighbor’s daughter comes over to play with your children and your dog bites her as the kids are rough housing. She will need to go to the hospital and get several stitches on her face to close the wound. Your renter’s policy will pay under Medical Payments to Others coverage (regardless of your legal responsibility) will pay $1000 per person for necessary medical expenses. This coverage can also be increased for a small additional premium. If the parents choose to sue you also, you will have $100,000 to go towards your legal costs and awarded damages. Higher limits of liability coverage are available.
- Additional Living Expenses – this coverage provides you living expense if you are forced out of your apartment by a covered loss and are subject to policy terms and limits. Loss of use coverage can provide up to a percentage (usually 10%) of your personal property coverage (Coverage C). This money can be used for necessary additional living expenses, such as hotel, meals out, laundry or other necessary expenses while your apartment is being repaired.
- Example: The apartment above you has a pipe burst in the bathroom during the day while everyone is at work. Water seeps into your apartment damaging the ceiling, walls, the carpeting, your furniture and other belongings in your bedroom below. It will take a couple of weeks to fix of the building damage. Your landlord would like you out of the apartment while this work is being done for the structure is unsafe and the workers need access to your apartment for extended periods of time. Your renter’s insurance will help you pay for this additional expense – hotel room, dinners out, and other expenses… That you don’t normally pay for when you have use of your apartment.
- Improvements – many renters may spend extra time and money to improve the rental home. If during a covered loss your improvements to your home are damaged or destroyed, your renters insurance will pay up to 10% of your Personal Property Coverage to repair or replace your improvements. Additional amounts of coverage are available.
- Example: You have a fire in your kitchen and you recently redecorated the entire kitchen including a new tile floor. Your cost to do this supported by receipts was $7000. You have your Personal Property Coverage (Coverage C) at $100,000. You can probably expect that your improvements will be either fixed or replaced. Without renter’s insurance coverage, your apartment would be fixed in the standard decoration of all the other apartments.
There are other coverages that you can add to your renter’s insurance policy. You can add a rider to cover valuable items such as jewelry, fine art, musical instruments or computers. We at Brownell Insurance are happy to go over renter’s insurance and these additional coverages with you. You may have more valuables than you realize. Come in and let us help you put a value to your belongings, so that you can have the peace of mind that if your home is damaged or broken into you are covered. Be sure to look at your apartment lease to see if your landlord requires you to carry renter’s insurance. You might also be pleasantly surprised that if you bundle your renter’s and auto insurance, you could pay less than $200 a year for this valuable renter’s insurance coverage.
Websites used for this blog are:
Information for this blog came from Travelers and Safeco insurance company websites.