Do your personal belongings mean a lot to you? Have you ever wondered how to replace them in the event of a fire or theft in your rental? Read on to learn more about renters insurance.
If you’ve taken out a mortgage to buy a home, then chances are you have homeowners insurance . Banks and mortgage loan lenders typically require new homeowners to have property insurance. It helps protect your property, possessions, and any injuries sustained by visitors. But what if you live in a rental apartment or mobile home? Is it possible to get the same level of insurance coverage for your belongings as the landlord? The short answer is yes.
Renters insurance is a type of property insurance that covers losses to your property. It even protects the covered person from liability claims if visitors suffer any injuries on your rented property. While your landlord is responsible for the structure you live in, having renters insurance can help you pay for the replacement of your belongings in the event of a natural disaster, fire, or theft.
What does renter’s insurance cover?
Renters insurance reimburses you for losses to your items covered by the policy. It also protects you if someone sues you after suffering an injury on your rental property. Most plans will reimburse you for temporary living expenses if a storm or fire damages your rental unit or home. Renters insurance also covers:
Personal items
Renters insurance, or HO-4 policy as it is commonly called, is for renters. It covers damage to personal property caused by disasters such as hail, explosions, riots, aircraft or automobile damage, vandalism, and volcanoes, among others. Generally speaking, renters insurance covers the contents of your rental home, while homeowners insurance covers property damage. Damage to your possessions from fire, theft, vandalism, plumbing, and electrical problems are covered by your renters insurance policy. Floods and earthquakes, on the other hand, are not protected and must be covered separately.
Responsibility
Liability coverage on your renters insurance policy covers you up to a specific amount if you are sued for an injury suffered by someone in your rented home. It also covers damages caused to others by you, your family, or your pets. It covers any court hearings and legal costs up to the amount of the policy, typically $100,000 but can go up to $300,000.
Living expenses
This coverage ensures that you will be compensated for temporary accommodation if your home becomes uninhabitable due to one of the specified risks. Hotel bills, restaurant meals, short-term rentals, and other costs incurred during the renovation of your home are covered.
Most renters insurance providers offer special coverage limits for personal property, such as boats and boating equipment. Additionally, if you’re a collector of some sort (coins, comic books, custom stamps , trading cards, etc.), you might be able to get coverage for your collection, too! Finally, renters insurance can also cover the loss of expensive items, such as jewelry, firearms, silverware, rugs, tapestries, etc., due to theft.
What does renters insurance not cover?
We recommend reading the fine print carefully to better understand what your renters insurance policy does not cover. In general, renters insurance does not cover damage caused by the tenant’s negligence. Some policies do not cover “acts of God,” such as earthquakes and floods.
Let’s say you have unusually expensive items, such as high-end electronic equipment, musical instruments, or prized artwork and antiques. In that case, you may need to obtain additional coverage, such as floater insurance in the form of a rider, a provision that modifies the terms of your basic insurance policy.
How does renters insurance work?
If your belongings are damaged or stolen, or if one of your guests is injured on your rental property, you can file a claim. If your claim is covered, your insurer will compensate you for the damages up to the limits of your policy.
In addition to the premium, your policy will have a deductible – an amount you must pay if you have a claim. If your deductible is set at $1,000 and you accidentally damage a couch worth $3,000, you will need to pay your deductible ($1,000) before the insurance company can cover the rest ($2,000). Keep in mind that the higher your deductible, the more you will have to pay out of pocket to repair or replace the damaged item. Fortunately, the higher your deductible, the lower your overall renters insurance rate will be. So set your deductible wisely.
How to apply for renters insurance
Make a list of your possessions
Before you apply for renters insurance, we recommend taking photos or videos of everything you own. If you own any expensive items, such as a laptop or high-end PC, write down their serial numbers as well. Making a list of the things you own will help you avoid being underinsured. While you may think that not all of your belongings are worth a lot of money, insurance provider USAA estimates that the average renter’s possessions are worth around $25,000. So, it’s important not to be underinsured when applying for renters insurance.
Read: A Complete Guide to Car Insurance Premiums.
While your insurance company may not want the inventory or pictures when you purchase the policy, they will be necessary if you ever need to file a claim. Keep copies of your inventory in a safe place, such as your email account, so they won’t be destroyed if your rental unit burns down. The next step in the process is to find a suitable insurance company that will meet your needs.
Shopping around
Here, we recommend shopping around to get at least three quotes to find which company offers the best deal. On a national scale , State Farm and MetLife are some of the largest and highest-rated insurance providers in the country. However, you can also opt for smaller companies that only operate in your state.
