What is Renter’s Insurance?

Are you currently renting a house or an apartment? Have you asked your landlord if your belongings are covered by his or her insurance policy? If he or she said “yes”, DON’T believe it. Your belongings are NOT protected—by your landlord’s home or association’s insurance policy—from such perils as theft, vandalism, fire, falling objects, and more. You need a renter’s insurance for it.

Most people, when transferring residence to a new apartment or condominium, are too engrossed with such to-dos as setting up a telephone line and cable service, informing friends and colleagues of their new address, arranging their rooms, and a lot more. The last thing they would think of is purchasing renter’s insurance, which is an unjustifiable act of negligence or ignorance.

What are the important things you need to know about renter’s insurance?

One thing that you should ask from your renter’s insurance provider is whether their coverage is an “actual cash value” or “replacement cost coverage”. Actual cost value coverage pays the worth of the property at the time it was damaged or stolen; while replacement cost coverage pays the actual cost to replace the damaged or stolen property. However, most insurance companies would ask you to use your own money to replace your damaged or stolen items, and submit the receipts for reimbursement. Although replacement cost coverage costs you more in premiums, it does pay out more if in case you need to file a claim.

The second important thing that you should do is to inform your insurance provider of the valuable items that you have. Items like jewelry, antiques and electronics may be covered to a certain amount; but unusually expensive ones like a diamond ring will require you to purchase a separate rider.

What does renter’s insurance cover?

Apart from the replacement or reimbursement of such stolen or damaged items as jewelry, antiques, and electronics, your renter’s insurance also covers your “additional living expenses” when need be. One scenario, where such an additional coverage is applicable, is when your apartment is unlivable due to a fire. In such case, the renter’s insurance policy will cover for your rent in another apartment that is in the same range as your original place. However, this policy has a limit of about 30 to 40 percent of its total value. Also, some providers would only continue to pay for your additional living expenses for a maximum of 12 months; while others limit such coverage to what they call as a “reasonable length of time”.

Another additional coverage applies to such special case as a waterbed that burst and flooded the apartment below yours. Your renter’s insurance covers the damages caused by your busted waterbed.

Liability protection is also covered by most renter’s insurance policies. This means that you are covered up to your liability limit if someone slips or falls in your apartment. Should this person sue you, the insurance would cover for what that person wins in a court judgment, along with your legal expenses; but only up to your policy’s limit.

So the next time your landlord misinforms you of such false notion as your belongings are protected by his homeowner’s insurance policy, proceed right away to an insurance company for your renter’s insurance policy.