Renters insurance is different from homeowners’ or auto insurance in that this kind of coverage only protects personal belongings within the walls of your rental home. The landlord usually carries a policy that covers the actual home or apartment structure, but if an accident, fire, or a person destroys any of your personal belongings, only renters insurance will pay you for lost or damaged items.
What it Covers
It is wise to think about the dollar amount it would take to replace all of your personal belongings. You may be surprised at how much total value there is and, certainly, most renters couldn’t come up with such an amount without a huge financial hit. Also, and quite importantly, a renter’s insurance policy protects you if someone injures themselves while inside your apartment and then sues you. Keep in mind that this coverage is so important there’s a likelihood that the landlord may mandate that you carry it.
Normally a renter’s policy will cover losses that are the result of such things as fire, theft, vandalism, leaking plumbing, and severe weather events. However, this insurance will normally exclude such natural disasters as floods, hurricanes or earthquakes. Coverage for these things can be obtained by separate policies and, depending on where you live, could be important to look into.
Types of Coverage
Renters coverage is pretty standard, though there are differences depending on the kind of home in which you live. The main difference is in the payout choices: one type is actual cash value, which pays you for the value of your items, less any depreciation. Replacement value policies will usually be more expensive, but you will enjoy substantially higher reimbursement for damages or losses, receiving the amount necessary to actually replace the items.
Just as homeowners purchase insurance to protect their property, so should renters protect theirs. It’s important to think of how you might fare financially should an accident or some other loss-causing event occur. By purchasing good renters insurance, you can help keep your rental home safeguarded while also saving over the long-term should the unexpected ever occur.
The big plus in owning a good renter’s policy is the peace of mind that comes from knowing your belongings are financially protected. An additional plus is that renter’s coverage is relatively inexpensive, yet can be a real a godsend when you need it.