If you rent your home, your landlord’s insurance typically covers the apartment building or complex, but it does not cover your belongings.
Additionally, depending on the circumstances, personal injury coverage may or may not be included in the landlord’s policy. It is therefore important to purchase renters’ insurance to protect yourself and your belongings in the event of an emergency.
Understanding why you need renters’ insurance is crucial. You must comprehend the different types of policies available to ensure you select the right one for your personal circumstances.
Your first step in getting a renters’ insurance policy is to know what you want coverage for in your home. Then, carefully review and scrutinize different policies to find the best one based on your personal needs and preferences for coverage.
Read on to find out what is covered by renters’ insurance and what to consider when reviewing an insurance policy.
Learn About Qualifying Damage and Emergencies
Emergencies arrive unexpectedly, and they come in many forms, from the mundane to the terrifying. A single disaster affects your home or your belongings in various ways. A storm often inflicts both water damage and wind damage.
Most renters’ insurance policies accommodate a broad range of emergency situations, such as the following:
- Storms: Typical coverage protects against wind, snow, hail, ice and sleet. Make sure your policy provides coverage for both the direct impact of the elements and any delayed damage that accumulates later on as this becomes an added expense.
- Fire: Renters’ insurance policies cover both the first-hand effects of fires and the damages caused by exposure to smoke. Fire coverage usually includes lightning damage as well.
- Vandalism: Vandalism of all types is typically included in renters’ insurance policies.
- Vehicles: Renters’ insurance policies protect against damage caused by vehicles such as cars and aircraft.
- Theft: Items stolen from your home are covered under renters’ insurance. Many policies include coverage for the theft of items while you are traveling. Although renters’ insurance does not cover your vehicle, it does cover the items inside the vehicle when it has been stolen.
- Electrical, plumbing, environmental and fire suppressant systems: In the event these systems malfunction, renters’ insurance reimburses policyholders for possessions that were ruined as a result.
- Other disasters: Many renters’ insurance policies protect against less common disasters, including volcanic eruptions, explosions and falling objects.
In addition, renters’ insurance encompasses injury liability insurance. This means if a guest in your home is injured, your insurance pays for the medical and legal costs associated with the injury.
If you do not have renters’ insurance providing this level of coverage, you pay for the expenses yourself. Depending on the circumstances, your landlord’s insurance may cover the incident. To ensure you are providing yourself with the proper level of protection, it is important to know what you and your landlord are each responsible for.
Learn About Optional Coverage
Although the basics of most renters’ insurance policies are the same, they sometimes differ from policy to policy. Different tenants have different needs and insurance companies recognize this and arrange policies accordingly.
Several types of policies are available, and each accommodates a range of circumstances, locations and incomes. Most insurance companies provide various options so you can find a package suitable for you and your belongings.
One recommended form of optional insurance is Additional Living Expenses. This policy provides additional financial assistance in the event you are forced out of your home from an emergency occurrence.
If your home experiences extreme damage, you have no choice but to move out temporarily. If you purchase ALE insurance, you receive funds to help you find somewhere else to live and get through your time of need. As well as providing funds for accommodation, you receive funds for dining and other necessary items.
If you own a pet, familiarize yourself with your policy to know what is and is not included. You may be able to obtain supplemental coverage for damage and injuries caused by pets, although this usually comes at a higher cost.
You must know if your policy covers damage or injuries caused by your pets. Whether or not injuries and damages that are caused by your pet are included in your policy will depend on several factors including:
- The species and breed of your pet.
- Your insurer.
- Other factors.
In fact, some breeds of dog are often excluded from renter’s insurance policies or can only be included at an additional fee. These breeds are often considered “dangerous breeds” by the insurer and are associated with a higher risk of incident.
If there is mold in your apartment building, it is the responsibility of the landlords and their insurers to clean it up. Typically, if the mold affects your personal belongings, you only gain compensation if it is a direct result of an eligible incident or emergency. If you want protection against mold damage, get an insurance rider or clause put into your contract at the time of purchase.
Other Factors to Consider
Renters’ insurance gives you peace of mind by knowing your family, your guests and your possessions are covered if an emergency happens. To make the most of your policy, know what you want coverage for and ensure you understand what is and is not included in your insurance.
When selecting your policy, keep the following tips in mind:
- Choose the right deductible. In the event of an emergency, you must spend a certain amount of your own money for damages before you are eligible to receive funds from your insurance policy. By setting a high deductible, you effectively lower the monthly costs of the policy.
- Replacement value versus cash value policies. Choose a replacement value policy or a cash value policy depending on your preference. The former pays the full cost of replacing a damaged or lost item. The latter only pays what the item itself was worth. Although the former policy costs more, it is worth paying extra for the added benefits. Carefully consider the differences of each policy to determine which is best for you.
- Ask questions. Never make assumptions about what is included in your policy. The only way to know for sure is by reading the policy in its entirety. If you have any questions after reviewing the document, get your questions answered by an insurance professional. Put any uncertainty to rest by spending a few minutes calling an insurance company or customer service representative to get the answers you need.
Depending on where you live, renter’s insurance may be optional or it may be required as part of your lease. Where optional, it is crucial that you consider obtaining renter’s insurance to protect yourself and your belongings. The cost of renter’s insurance is typically low compared to other forms of insurance but will vary based upon several factors.
Fortunately, once you have determined the type of policy you would like to maintain and the type and amount of coverage that you need, it is easy to shop around for the best rates. When searching for an insurer, you may also want to consider your auto insurance agency, if that agency provides renter’s insurance. It is common for these types of insurers to provide you with discounts when having multiple policies through that same insurer.