People often ask us whether renter’s insurance is really necessary. The answer each time is the same: yes, definitely. It’s inexpensive and worth its weight in gold. To help you understand why it’s important to have in your policy, here are eight important things to know about renter’s insurance.
1. Your landlord’s insurance policy doesn’t protect you
Of the millennials surveyed, 52% said they don’t have renters insurance because they (wrongly) believe their landlord’s insurance will cover their personal property. Landlords have insurance policies covering structural damage to the building, but this coverage does not apply to your belongings. It also will not protect you from being liable for accidental damage caused by you or one of your guests.
2. Without renter’s insurance, you face liability
If someone visits your apartment and gets injured, you can be sued. Renter’s insurance can help cover your legal costs and the injured person’s medical bills, but without it, you’re on your own. Personal liability protection covers unintentional bodily injury as well as property damage.
3. Renter’s insurance covers more than stolen property
In addition to liability protection and reimbursement for stolen property, renter’s insurance provides coverage for damage caused by fire, lightning, smoke, windstorms, hail, and vandalism. Renter’s insurance also will cover your living expenses if you have to relocate during repairs. Your property doesn’t have to be in your apartment at the time that it is stolen for it to be covered. If your luggage is stolen while on vacation, for instance, some policies will reimburse your losses, and it is common practice for insurance companies to cover belongings stolen from your car. Most policies cover your property while you are in the process of moving as well, as long as you remain within the same state.
4. There are two types of reimbursement
Some renter’s insurance policies pay the actual cash value of your possessions. This means you will only be reimbursed for what your belongings are worth less depreciation. Other policies cover replacement cost, which is the amount it would cost to buy a comparable item today. Policies that cover the replacement cost of an item will not include deductions for depreciation.
5. Policies have limits and exclusions
Each policy has specific minimum and maximum coverage amounts for liability, as well as for property. There are also payout limits on certain types of property such as jewelry, computers, and firearms. In some cases you can elect to have additional coverage for expensive items. Check the policy’s fine print for any specific exclusions that apply to you.
6. Certain pets can make things complicated
Some municipalities require that certain dog breeds, for example, are covered by insurance for damages and injuries caused by the dog. It’s possible that your renter’s insurance policy will cover your pet, but if not you will need to purchase additional coverage.
7. Natural disasters are not covered
Renter’s insurance does not typically cover natural disasters or catastrophes. If you live in an area prone to earthquakes or floods, you might be able add additional coverage for these events. Ask us about options and do your own research as well.
8. There are several ways to save money
You may qualify for a number of discounts, depending on your insurance provider. Many companies will reduce your premium if you have a fire alarm, burglar alarm, deadbolts on exterior doors, and/or a sprinkler system. Many renters save even more money on their policy by bundling with another policy, such as auto insurance. The amount of your deductible will also impact the price of renter’s insurance, so if you are willing to go with a high-deductible policy, this will provide additional savings on your annual premium.