If you rent or lease, you need renters insurance to protect your personal property and your lifestyle.
What does renters insurance do?
There are three parts to renters insurance. The first is coverage for your personal belongings, the second is liability coverage, and the third is loss of use coverage. All of these play an important role in protecting you as a renter since your landlord’s insurance on the property will not cover those risks specific to you.
Are your personal belongings protected?
When you rent or lease, your landlord’s insurance usually only protects the building itself—not your personal belongings. Renters insurance is the only way to protect your valuables, and it’s much more cost-effective than you’d think. The amount of insurance you need will depend on the value of your possessions so that they can be replaced. It’s important to know that certain events might be covered, while things like earthquakes and flooding are typically not. Here are some of the most common covered events in a renters policy:
- Burst Pipe
- Fire/Smoke
- Lightning
- Theft
- Vandalism
- Water Back-Up
- Wind
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Personal Property
Risk Factor
Unpredictable losses can occur to your property due to burglary, fire, water damage, storm, and more.
Solution
Personal property, such as furniture, rugs, TVs, stereos, clothes, and more may be covered under your basic insurance policy. However, items like jewelry, furs, silverware, antiques, collectibles, and other valuables should likely be insured separately.
Limits and Exclusions
Risk Factor
Some types of personal property are subject to limits of coverage under renters insurance policies. These limits vary by the type of property and by what caused the loss or damage. For example, jewelry, bicycles, collectible cards, and coins may have limited coverage or may not be covered.
Solution
Obtain a personal floater or schedule your valuable possessions to ensure you’ll have the money to replace them.
Additional Living Expense
Risk Factor
If the building you live in has a loss from a covered peril under your renters insurance policy that makes your apartment or home uninhabitable, you will need to find somewhere else to live while the repairs are undertaken. This can be expensive and inconvenient.
Solution
Be sure your insurance policy includes additional living expense coverage. If you need to move out and rent another location, this coverage provides for the increase in living expenses–such as moving costs, increased food costs, and other expenses.
Liability
Risk Factor
You are responsible if you or a guest in your unit trips and falls or sustains an injury while on your property.
Solution
Be sure that you have adequate liability insurance to protect for claims made against you for bodily injury or property damage – such as a slip and fall or other allegation. Liability coverage also provides protection should you become legally liable for unintentional bodily injury or property damage anywhere in the world.
Medical Expenses
Risk Factor
You're responsible if a guest is injured while on your property and you may be required to pay their medical expenses.
Solution
Ensure your insurance policy covers this risk. In the event a person is injured in your unit, he or she can submit medical bills to your insurance company. Medical expenses are usually paid without a liability claim being filed against you, with typical limits ranging from $1,000 to $5,000.
Landlord
Risk Factor
You may not be able to rent the apartment or home if your landlord or property manager requires renters insurance and you do not have it.
Solution
Having a renters insurance policy allows you to provide a certificate of insurance to the landlord or property manager showing that you have the coverage required to rent the apartment or home.
Improvements or Betterments
Risk Factor
Any improvements or betterments that you have made to your unit are subject to damage.
Solution
Be sure to obtain coverage for improvements or betterments that you have installed in your apartment or home.
Contents Away from Home
Risk Factor
You may take your valuable property outside of your unit. For example, what happens if your laptop or golf clubs get damaged or stolen while traveling?
Solution
Be sure to add off premises theft coverage to your policy to cover your personal property while your belongings are away from your home. Auto insurance does not usually cover personal property stolen from your car.
Premises Liability
Risk Factor
You may be responsible for damage to your apartment or dwelling should you, for example, have a leaking sink or accidentally start a fire.
Solution
Be sure your policy has liability coverage that includes tenants legal liability or premises liability. Your landlord may require that you to have this type of insurance protection in place as a requirement before renting the property to you.
How does liability coverage protect you while renting?
Liability insurance protects you from your legal liability for bodily injury or property damage claims. Liability limits from $100,000 to $500,000 are typically offered. Medical Payment to Others pays for necessary medical expenses for covered persons and situations. Medical payments limits are usually between $5,000 and $50,000 Loss to property rented to, occupied, used by, or in the care of an insured, is excluded, except property damage caused by fire, smoke, or explosion. Be sure to check your renter’s insurance coverage details—there are options and limitations for roommates, business and professional exposures.
Get coverage for additional living expenses.
If the rental property is destroyed or otherwise uninhabitable after a covered event, you may get a payment for additional living expenses. This safety net can help you recover from such a loss that you would otherwise have to pay for out-of-pocket. This may include coverage for hotel bills, temporary rentals, meals, and other expenses due to loss of use of the property you were renting or leasing.
Exceptions of renters insurance.
Renters insurance policies exclude autos, watercraft, aircraft including drones. Many policies limit or exclude low speed vehicles such as electric scooters or bicycles. There are limitations for jewelry, firearms, fine arts and collectibles. Flood or earthquake require separate coverage. Unrelated roommates not listed as insureds on the renter’s insurance policy, are not covered for their property or personal liability.
Whether you rent a home or a studio apartment, you can’t afford to not have renters insurance. Contact us to go through your options.
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