When you rent, your landlord’s insurance policy won’t cover any damage or loss to your own personal property. It will only cover losses to the building structure itself. To protect your property, you must have a separate renter’s insurance policy. Renters insurance covers your personal property and household items in the event of fire or other loss. It also offers you financial protection if a visitor is injured in your home.
The importance of renters insurance
Even as a renter, a mishap can still cost you money or make you the target of a lawsuit. You can help protect yourself and your property with renters insurance.
When it comes to your clothing, jewelry, furniture, stereo, TV and other personal belongings, renting an apartment or house is no different than owning a home. You could still face the cost of repairing or replacing these items from damage caused by fire, theft, wind and other hazards.
Similarly, your exposure to lawsuits isn’t that much different from that of a homeowner. You could still be held legally responsible for an accident, whether it happens at your residence or elsewhere.
What renters insurance protects
You may think your things aren’t worth much. But the average person has over $20,000 worth of stuff. And that’s stuff that’s probably not covered by a landlord’s insurance policy.
Most renters’ insurance policies are similar to policies you would have if you owned your home. Your renter’s policy will cover your furniture, clothing, TV, stereo, appliances and other personal property subject to the policy deductible.
For example, renters’ insurance will pay to repair or replace personal property that is damaged, destroyed or stolen. Limits on personal property can vary by company, but most offer at least $4,000 worth of protection. Renters policies generally limit payment for certain losses as follows: $100 for lost cash; $2,500 for personal property used for business; $500 for valuable papers; and $500 for theft of jewelry, watches and furs.
Also it will give you liability protection if you are legally responsible for another person’s injury or property damage. If someone is injured in your home and files a lawsuit, your landlord’s liability policy may not cover the damages. A renter’s policy automatically provides $25,000 in liability coverage. You may want to consider extra coverage available for an additional premium.
A renter’s policy normally will pay for the actual cash value of your losses. In other words, depreciation and wear and tear will be subtracted from the value of your property. However, you can add replacement cost coverage for about 15% in additional premium. It pays the full cost of replacing your damaged property, minus your deductible. Many policies carry a deductible equal to one percent of the amount of the policy. (Example: A renter with a $25,000 policy would pay the first $250 before the insurance company pays.)
Getting renters insurance
Dependents, such as college students, may have limited coverage through their parent’s or guardians’ homeowners policies while temporarily living away from home with a special rider to the policy. However, you will need to consult with their agent to determine what coverage, if any, is available through their existing homeowner’s policy.
Because insurance companies’ rates vary widely, it pays to shop around and get premium quotes from several companies for the amount of coverage you want. It also is important to look into an insurance company’s financial stability and service record.
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