Renters Insurance

What Does Renters Insurance Cover?

The goal of renters insurance is to make sure you and your property are covered in the case of unexpected events or “covered perils.” The events covered under renters insurance may include:

• Fire
• Lightening
• Windstorm
• Hail
• Theft
• Vandalism
• Impact by a vehicle

Protect Your Valuables

If your home is broken into and valuable items are stolen, including furniture, electronics, jewelry, clothing, etc., the money to replace all of these items would come out of your pocket without renters’ insurance. The same would be true if your belongings were destroyed in a house fire. However, your values would be protected with a renters’ insurance policy.

When considering obtaining renters insurance, it’s a good idea to take inventory of your belongings to see how much personal property coverage you might need. Additionally, there are two different types of coverage for renters: actual cash value and replacement cost.

Actual cash value coverage pays what the property is worth at the time of theft or when the damage was incurred. This is the least expensive renters insurance type, as it accounts for the depreciation of property.

Replacement cost pays the full amount of replacing property with new items, which is around 10% more expensive than actual cash value coverage.

Liability for Injuries

Renters insurance can protect you, as a renter, from being sued by another resident if they were to be injured in your rental home. Injuries could include your child’s friend falling off the bed and breaking their arm or a neighbor injuring their back helping to move your furniture. In either case, renters’ insurance would protect you from a lawsuit.

As with other coverages, limits apply to how much your policy pays out after a covered loss. Make sure your policy contains the amount of coverage you will likely need.

Pet Coverage

If you have a pet, renters insurance can provide liability coverage so that if another resident were bitten by one of your pets, you would be protected from legal actions, including a lawsuit. Without renters’ insurance, you would be at risk of being sued.

Additional Living Expenses

Some policies will cover additional living expenses in the event that you cannot stay at your current residence during a covered loss. For example, if damage from a fire makes your apartment uninhabitable, necessitating a hotel stay, your policy might cover the costs.

What Isn’t Covered By Renters Insurance

Almost as important as what is covered by renters insurance is what isn’t. There are a few instances that are not covered by renters insurance and may need a separate policy, such as:

• Sewage backups into the residence
• Earthquakes, floods, or other “acts of God”
• Unusually expensive or valuable items, such as high-end electronics, musical instruments, or art collections and antiques, might require an additional policy
• Home businesses

It’s important to assess your prospective needs and potential liabilities based on multiple factors. For example, while floods are not typically covered in general renters insurance policies, if you live in a flood zone it might be helpful to purchase additional flood insurance. Other policies, such as umbrella insurance, can be personalized to help cover you beyond general personal policies.