Whether you rent an apartment or a home, the landlord most likely has an insurance policy that can cover the building and common areas. However, it won’t cover the items inside your apartment or a rented home, such as your clothing, furniture, electronics, and other personal belongings. If you don’t have the funds to replace items such as clothing, electronics, valuables and furniture in case of damage, theft, fire or vandalism, you probably want to purchase a renters insurance policy.
What Does Renters Insurance Policy Cover?
Renters insurance offers various types of protection. Below are three (3) critical elements found within a Renters Insurance policy.
Personal Liability Protection
A renters’ policy can protect your financial wellbeing if someone claims to be injured due to your actions or negligence, or there is property damage to someone else’s property caused by your actions. Having renters insurance can protect you from paying out of pocket for legal fees and covered damages if you are found liable.
Liability coverage pays for medical bills if someone needs stitches because your dog bit them. It can also cover the cost of repairing a neighbor’s window that breaks when your child accidentally hits a baseball into it. Many landlords require tenants to have at least $100,000 worth of liability coverage.
A renters insurance policy typically covers your personal property in case of damage due to events that are outside of your control, such as:
• Water damage
Please note that water damage is different than flood damage. Flood damage comes from external sources, such as overflow from a body of water. Water damage happens when your pipes break, and your bathtub overflows, a water main breaks, or your roof leaks.
Renters’ insurance does not cover flood damage. You’ll need a separate flood insurance policy if you’re concerned about losing your possessions to rising water outside the home.
Make sure your renters’ insurance policy provides replacement cost on your contents. Otherwise, you may only be receiving a depreciated value of your items.
If you’re someone who likes to travel, check to see that your policy includes coverage for theft away from the apartment or home. Some carriers can limit coverage to the residence only.
A common mistake that people make is to include valuable items under their renters’ policy. If you own expensive belongings, a separate valuable items policy might be needed as well.
Loss of Use
Renters insurance also covers loss of use. If there is significant damage to your unit (or home), you might need to move out during the repairs. In that event, your policy can provide funds to help pay for a hotel and other expenses that you incur during temporarily relocated.
What Are the Limits of Renters Insurance Policy?
Most insurance companies can offer up to $1M of personal liability coverage. It may sound like a lot, but in the event of a lawsuit, you can be glad to have the coverage. If $1M is not enough based on your assets, speak with your broker about additional excess liability or umbrella protection.
Concerning personal property coverage, it all depends on the value of what you own. Take inventory and come up with a ballpark estimate of how much it would cost to replace the items.
If you have any questions, contact me. I can help you determine the coverage limits that would be appropriate.