Protect the things you value in your home – this is the essence of renters insurance. Your landlord’s homeowners insurance will only cover the property you’re living at, leaving your personal belongings out and yourself vulnerable to financial losses.
In a country where there are more renters than homeowners, getting renters insurance is imperative. Learn the basics of this policy, what it covers and not, limits and tips to help you buy one for your peace of mind.
What Is Renters Insurance?
Also known as tenants’ insurance and sometimes written as renters’ insurance, renters insurance caters to individuals or families renting their homes. The number of renting households has grown by 7.6 million in a decade (2006-2016), the highest since 1965, according to Pew Research.
A renters insurance policy does not cover the home per se because that is covered by the landlord’s homeowners insurance. Buying renters insurance is an option although your landlord or apartment complex could require one.
For a morning latte, as one insurer said, you can protect the contents of your home through renters insurance.
What Does It Cover?
Renters insurance offers three primary coverage areas:
- Personal property coverage. If your computers, furniture, electronics and/or appliances were damaged or lost due to fire, vandalism, theft, water damage (but not flooding), storm, wind or other covered perils, the insurer will pay you the cost of the damaged/lost items. You can choose between actual cash value and replacement value when you apply for a policy.
- Loss of use. This covers your additional living expenses when your home becomes uninhabitable after a covered loss. The insurer will reimburse your hotel, food, and other reasonable expenses incurred as a result.
- Liability coverage. When someone is injured in your home and you are found to be legally responsible for the injury, the medical bills of that person, as well as your legal bills in connection with the lawsuit will be covered by your policy.
Your insurance will also cover debris removal after a covered loss happens and cost of any emergency repairs. For example, your insurer will pay the repairs of your window after a break-in.
While the structure of the dwelling is not covered by renters insurance, minor alterations you made to the home may be included.
How Much Does it Cost?
A renter pays an average of $187 in renters insurance per year or $15 to $30 per month according to a ValuePenguin survey. This could change where you live, e.g. average monthly renters insurance cost in Alabama is $19.92 vs North Dakota’s $9.58 per month.
One thing’s sure, a renter’s insurance policy is significantly less expensive than a homeowners insurance policy.
This cost could be pared down further with discounts such as when you install a home monitoring system, bundle your policies, stay claim-free and more, depending on the insurer’s offers.
Getting Renters Insurance
In looking for viable renters insurance policies, look into these details carefully.
1. You might have to increase your maximum limit per category. It’s different from the overall claim amount of the policy and could be a problem if the value of the items damaged, e.g. jewelry and fur, is greater than the maximum payout for its category.
2. You might have to protect your business materials and supplies. Some insurers don’t cover business pursuits or professional services. Others do offer such coverage but it does not extend to supplies and materials relating to business kept at home.
3. Your renter’s insurance policy will not cover losses due to intentional acts. Cars, boats, and planes are also not covered.
Shopping and comparing renters insurance quotes remains the best policy. Talk with insurance specialists today!