What is Renter’s insurance?
In simple terms, Renters Insurance is a personal property and liability policy. It provides coverage for your personal property if they are lost, stolen or damaged in your rented home or apartment. A Renters Policy will also cover your liability if someone is injured at your home and it is deemed your fault.
What is covered with a Renters Policy?
Like we mentioned before a Renters Policy will cover your personal property if it is lost, stolen or damaged, but the loss has to be the result of a covered peril or risk. The most common perils for a Renters Policy are fire, theft, and vandalism. Be sure to check your policy for named perils or ask your insurance agent what is covered.
How much will a Renters Policy pay for a personal property loss?
This depends on your coverage. First, it will only cover damaged or lost items. Second, it will pay based on the type of coverage you have, typically there are two types, “actual cash value” or ACV and “replacement cost”. What’s the difference? ACV is will pay for what the item was worth minus the depreciation value of the item. Replacement cost will pay the amount to cover a similar new item. There are certain limits to items such as jewelry, collectibles, and firearms. Like most other insurance policies there is a deductible that must be met before a loss is paid, also there is a loss limit for both personal property and liability coverage.
What does Personal Liability cover?
Personal Liability covers you in the event of an injury or accident in your house or apartment that is deemed your fault. A slip and fall in your home, your pet bites a guest and they need medical attention. These are typical accidents that happen every day and if you don’t have liability coverage you will be responsible for all costs. It will also cover you in the event that you incur legal fees due to an injury or accident in your home. Limits of liability general start at $100,000. Again, be sure to check your named perils, not all types of pets are covered. Large breeds of dogs like Pitbulls and Rottweilers are generally not covered.
What will the Renters Policy not cover?
Renters Insurance will not cover damage from normal wear and tear or misuse. For example, if your television is damaged due to your negligence or misuse. Your property is also not covered by natural disasters such as earthquakes and flood damage. Renters Insurance policies will also not cover anything you can not prove you own. Keep receipts for major purchases and take pictures of your belongings.
Why do you need Renters Insurance?
Many landlords today require you carry some renters insurance if you live on their property. A common myth for renters is that the landlord’s insurance will cover your belongings in the event of a loss. This is not true! The landlord’s insurance will only cover the dwelling and a limited amount of the landlord’s property.
The average household has over $20,000 in personal property in their homes. Computers, televisions, jewelry, clothing add them all up and you will be surprised how much your property is worth. Without an insurance policy to cover your belongings, you may take a total loss on any of your lost, stolen or damaged property.
Liability! If you do not have an insurance policy with liability coverage and there is an accident in your home or on your property that is deemed your fault or negligence then you will be responsible for any medical payments, legal fees and legal judgments against you.
How much Renters Insurance do I need?
There is not a uniform answer for this one. The best thing you can do is take an inventory of your personal belongings and estimate how much it would cost to replace them. Then you will need to know how much liability coverage you will need. Liability coverage usually starts at $100,000 and goes up from there. If it is just you or you and your partner and you typically don’t host many guests then $100,000 might be more than enough for you. If you have children, teens, and young adults and they constantly have friends coming over, your risk will be higher and you should have a higher coverage.
How much will Renters Insurance cost me?
Renters Policies are very affordable. The average cost of a Renters Policy is around $10-$15 per month. If you bundle your Auto Policy with your Renters Insurance you could pay even less.
How do I find the best rates?
This is an easy one. Contact an Independent Insurance Agent! Independent Insurance Agents sell insurance for a variety of different insurance companies. They will be able to quote you the best rates with the best coverage and are not biased when it comes to which company you choose.
The following article was written by Michael at Fairway Insurance!