Renter’s insurance exists for a multitude of reasons.
Renter‘s insurance typically covers losses to personal property, as well as liability protection in case someone is injured while in your home or apartment building. It also provides coverage in the event of theft or a natural disaster. Some policies also provide additional living expenses if you are forced to evacuate your home due to a covered event.
However, the majority of renters in the United States do not have a renter’s insurance policy. In fact, whereas 95% of homeowners have homeowner’s insurance, only 37% of renters have renter’s insurance, according to a 2014 study by the
Insurance Information Institute. However, many of the events that both renter’s and homeowner’s insurance cover are the same.
Having renter’s insurance does not protect your landlord from outright property damage to your apartment or house’s physical structure, otherwise called dwelling coverage. Dwelling coverage means a part of your homeowner’s insurance that will cover your home for being rebuilt or repaired if it’s damaged by hazard.
It covers your home and any content that is attached to it, like a garage.
Your landlord or leasing company must have their own insurance policy in a case like that (usually homeowner’s insurance plus landlord insurance). Renter’s insurance is generally very affordable. I
t is a good idea to have even if you do not think you need it. This type of insurance can provide peace of mind in case of an emergency.
But what does renter’s insurance cover?
Read on to find out!
Renter’s Insurance Basics
Renter’s insurance protects your finances, your personal belongings, and guests of your place from random chance events.
Here are some examples of scenarios in which you can file an insurance claim, and you won’t have to drain your savings to live comfortably:
- An intruder has broken into your place and stolen your personal computer. Your insurance will cover the replacement cost. It also covers if you or someone else gets injured or experience damage by other people.
- A guest in your apartment burns themselves on your stove and needs to go to the hospital. Your insurance will cover their medical bills.
- Leakage or overflow of water or stream. Your insurance will cover any damaged belongings caused by a water leak. It will also cover your stay in a hotel during property repairs (loss of use)
- Named perils, like fire or lightning, storm damage, vandalism, damage to electronics, riot damage, vehicle damage, ice-breaking due to weight of ice, and water damage like mentioned above.
Three Main Types of Coverage
There are three main areas of coverage that most renter’s insurance policies offer. These are personal property coverage, liability coverage, and additional living expenses. Note that not all plans are created equal, and some plans will come without certain types of coverage. It offers different types of protection.
Here are three coverage types in renters insurance:
Personal Property Coverage
Personal belongings are the first thing that people think of when they think of renter’s insurance. When you live on someone else’s property, you bring a lot of your belongings into a structure that a leasing office maintains. Personal property or possessions includes clothing, furniture, and electronic belongings. This coverage includes protection against theft or environmental damage.
A credit card is also one of the personal properties that most of us have to protect if it is lost. Not only does it protect you from theft, but it also protects losses incurred if a burglar breaks into your house and steals your credit card.
It is important to have a valuation of your personal property because if something serious happens, it will be considered a covered loss. You can usually choose between replacement cost or actual cash value (ACV) coverage. These are slightly different options that may change reimbursement amounts. Different options may also change your insurance rates.
Liability Coverage
If you are planning to have guests over frequently, you should consider buying a plan that comes with liability coverage. Liability coverage covers all the events that happen inside your place. This includes guests’ injuries, accidental damage, and medical bills.
Liability coverage includes property damage and bodily injury coverage. Property damage covers other party damage, like vehicles, yards, etc. Bodily injury covers the injuries that someone else has sustained due to an accident, including medical expenses and prescriptions.
The last thing you want is a lawsuit if someone visiting your place gets hurt. Liability coverage will protect you from accidents that result in unexpected damage.
Additional Living Expenses Coverage
Lastly, most insurance policies include something called additional living expenses. This covers any hotel stays and relocation costs following a catastrophe. Say a fire, winter storm, or other natural disaster damages your apartment, so you must evacuate temporarily. This part of your renter’s insurance covers the cost of temporarily relocate.
Additional Types of Coverage
Based on where you live, your renter’s insurance may need to include additional types of coverage. In certain areas, it is wise to get additional coverage for regional dilemmas like flood damage or earthquake damage. Make sure you know your policy’s insurance terms before committing to one; always shop around.
Another factor that you may want to consider is the overall value of your belongings. If you own a lot of expensive jewelry or tech products, for example, standard coverage limits may be too low for your specific needs. Look into buying
“floater” coverage or endorsements for expensive items. This can protect you from theft and even loss of valuable items.
How To Easily Get Renter’s Insurance
If you already have another type of policy from your current insurance company, you are in luck. It is generally a simple process to add renter’s insurance to a different policy, like your auto insurance. Combined policies can award you discounts too. Consider combining insurance policies under your current policy. You may be able to save on your car insurance, life insurance, or other insurance you may have.
When it comes to financial health, Shiirs is here to help you thrive. The first step to finding affordable renter’s insurance that covers what you require is to compare rates.
Follow this link to get helpful renter’s insurance quotes from Insurify.
