The Nuts & Bolts of Renters Insurance
The renters insurance policy is very similar to the homeowners policy without coverage for the structure. It’s important to know that when you rent an apartment, home or condo, your stuff inside the structure is not covered by the dwelling owner’s insurance policy. Your liability exposure is also not covered by the landlord’s policy. This is where the renters policy makes very good economic sense. Think of your renter’s policy as a scaled-down homeowners policy:
The renters policy covers all of your personal property such as furniture, clothing, appliances, electronics, jewelry, paintings, and anything else you brought with you when you moved in. The Perils insured against are typically the same as the homeowner policy, so coverage is comprehensive. Similar to the homeowner policy, there are sub-limits on special items like jewelry, expensive collections, furs, and guns. These sub-limits can easily be overcome by “scheduling” those special items and their appraised value of coverage on a worldwide basis.
Most insurers allow the applicant to establish a value for their personal property that may be a little overwhelming, so there is software available to help you arrive at the appropriate value.
Personal Liability Coverage
For the amount of protection provided, your liability coverage delivers a lot of bang for the buck. This is the part of your policy that will protect you if a guest is hurt on or in your rented property and you are found responsible. Your insurance company will pay for your defense costs, fund any settlement agreements, or pay a judgment awarded by the court. Many renter’s policies offer some level of Liability included in the policy, but you can easily increase the limit to $300,000 for a small additional premium. Bad things can happen so always get the maximum amount of coverage available.
Additional Living Expenses
Typically a misunderstood coverage, the additional living expense coverage can be a lifesaver if your home or apartment is partially damaged and you must temporarily relocate while it’s under repair. This valuable coverage steps in to pick up your cost of relocating until you can get back to the home or apartment. The policy covers things like hotel bills, restaurant expenses, and other costs you normally wouldn’t incur living at home. By the way, if you must place your belongings in storage while the home is under repair, your renter’s policy extends to contents in storage also.
It’s very surprising that the Insurance Information Institute reports that a very small number of renters throughout the country even purchase renters insurance. In fact, only about 30% of renters nationwide even bother to purchase this valuable coverage. This statistic is startling when you consider the average renter has about $30,000 worth of personal belongings, and the average premium for a renters policy is about $25 per month. Why put yourself and your belongings at risk even if on a temporary basis? Speak with a licensed professional who will be happy to discuss coverage and pricing to get you and your family protected.