The Ins and Outs of Renter’s Insurance

By Diane Tait

Image courtesy Pixabay

If you rent your home instead of owning it, you may have considered renter’s insurance.  Like homeowner’s insurance, a renter’s policy is there to cover your assets that could wind up lost damaged or destroyed by such things as theft, fire, flood or storm.  The reason more renters don’t follow through and acquire renter’s insurance is because they feel the costs outweigh the risks. Unlike a homeowner, if the house, apartment or room you rent is damaged or destroyed by fire or water, all you’re out are your belongings.  The property itself has no value to you other than putting a roof over your head, right?  Well, not exactly as you’ll soon find out below.

      1.      Personal Property Coverage –  As you might have guessed, this is the part of the policy that covers your belongings.  If you were to come home only to find your rented home either burnt to the ground, under 3-feet of water or cleaned out entirely, how much would it cost you to replace everything with the exception of the shirt on your back and your car?  More importantly, if your belongings were wiped out by fire or flood, where would you stay and how would you pay for temporary lodging?  (You see, a renter’s policy also provides “Loss of Use Coverage,” that helps cover living expenses under certain circumstances.  You, on the other hand, would find it difficult to deal with the sudden loss of your clothing, possessions and lodging should the worst come to pass.  (Bear in mind that most renter’s policies require an additional rider to cover you in case of flood.)

      2.      Personal Liability Coverage – Do you own a dog?  If your dog bites one of your friends, you could suddenly find yourself being sued.  If a guest slips and falls when they stop by your place for a visit, you could suddenly find yourself being sued.  Even if either of these people don’t sue you, they could still demand you pay their medical expenses plus the loss of wages for the time it takes them to get treated.  If you have renter’s insurance, the costs for lost wages, medical and legal expenses will be borne by the insurer.  If not, it’s all on your dime.

     

Image courtesy Pixabay

3.      Do you like to travel? – What happens if you lose your laptop or that expensive digital camera you saved up for while on vacation? With renter’s insurance, you will be reimbursed.  Without it, you can wave bon voyage to your expensive electronics.  Not only do most renter’s policies pay to replace items lost or stolen in transit when you vacation, many will pay you if you drop and damage your belongings, even if the fault was yours.

      4.      It takes a thief. – Likewise, if you come back to your hotel room to find some or all of your belongings have been stolen while you were on the beach, renter’s insurance will cover the loss.  In fact, the only loss that isn’t covered by a renter’s policy is if you literally misplace your laptop or camera.  In that case, it’s on you.  But should any of your belongings get stolen while they are securely locked in your room or your car, your renter’s policy will come to the rescue.  Should your wallet or checkbook be stolen and a thief runs amok with your checks and/or credit cards, you would be reimbursed.

Image courtesy Pixabay

      5.    My dog ate it. – Other than losing your belongings by being absent-minded, there are a few other exclusions that you should to understand.  Should your pet damage or destroy an item, you’re not covered.  If you own an extremely valuable piece of jewelry, artwork, an heirloom or a collectible, you need to talk to your insurance agent to see if the item is covered or if you need to purchase additional coverage.  If you have a roommate, their stuff isn’t covered.  They will need their own policy.  If your vehicle is stolen and your iMac was in the trunk, the renter’s policy will reimburse you for the loss of the laptop, but not the car.  (That’s what auto insurance is made for.)

 6.      Won’t my landlord cover my loss? – I’m afraid not.  Even though your landlord has homeowner’s insurance, this only provides coverage for his or her property.  It doesn’t cover property owned by guests or renters.

      7.      Isn’t renter’s insurance expensive? – Not really.  A typical policy costs less than $20 per month and includes $10,000 in personal property coverage and $100,000 in liability protection with a $250 deductible. 

      8.      What does renter’s insurance cover? – A typical policy includes loss by everything from theft and fire to windstorm, hail damage, explosions, smoke damage, vandalism, falling objects, leaks, freezing, short-circuits, steam damage, plane crashes and volcanic eruptions.  It also covers personal liability, medical bills, temporary living expenses including food and housing. Lease a storage unit?  Many renter’s policies cover damage or loss of belongings in storage units.  If your power goes out for an extended period of time forcing you to toss the groceries in your fridge out, a renter’s policy would reimburse you for the loss.  If you borrowed your best friend’s laptop only to have it stolen from your rental, this loss would be covered under a renter’s policy. If rodents or insects were to damage your belongings, you’re covered.    

      9.      How much coverage do you need? -  While typical policies provide $10,000 in personal property coverage, you should ask yourself if this is enough.  The only way to know how much your belongings are worth is to take an inventory and add up the figures.  You also need to decide on whether you want to insure your belongings on an actual cash value basis or for the replacement value.  Unless you want to have to dig in your pocket to make up the difference, always insist on replacement value. 

      10.  Ask your insurance agent – If you don’t want to have the variables inherent in a renter’s insurance policy come back to bite you later, you need to have a frank discussion with your friendly local insurance agent.  Speaking of bites, if you own a dog, you need to tell your agent what breed, since there can be exclusions for some breeds. 

Diane Tait owns and operates A&B Insurance.  To find out more about how you can save money on insurance, go to her site or fill out the form at right.