What Does Renters Insurance Cover?
So, you need or just want to live for rent. And just because you live for rent doesn’t mean you can’t be protected. The renters insurance cover intervenes here.
This article will provide everything you should know about renters insurance: what it covers, what doesn’t covers, how to obtain it, and more.
Key Takeaways
- Renters insurance is similar to homeowners insurance. However, it’s for those who lease or rent property, including apartment buildings, condos, dorms, and houses.
- The typical renter’s possessions have a value of around $20,000, according to insurance company USAA.
- Important steps to obtaining and keeping a renters insurance policy are inventorying your belongings and maintaining a spreadsheet of the items.
- Renters insurance typically covers damages or loss to objects within the house caused by vandalism, fire, theft, and electrical and plumbing problems.
- There are two methods by which renters insurance pays out: actual cash value, that is, the value of the property when it suffered the loss, and replacement cost, which covers the entire expense of replacing damaged items in new models.
TABLE OF CONTENTS:
- What does Renters Insurance Cover?
- Coverage Type Differences
- What Renters Insurance doesn’t Cover?
- Types of Renters Insurance Polices
- How to Get Renters Insurance
- Assess your Belongings and Insurance Needs
- Choose an Insurance Company
- Start the Application Process
- Specify your Insurance Policy
- Pay your Insurance Policy
- How to File A Renters Insurance Claim?
- F.A.Q. About Renters Insurance Cover
What does Renters Insurance Cover?
Renters insurance (also called “tenant insurance”) is a type of insurance policy that can cover some natural disasters, theft, water damage, and more that could happen in the rented property. Renters insurance is recommended to protect the space and belongings in the rental home, condo, apartment, or dorm. The property tenant will be able to benefit from the insurance when an unexpected event occurs, only if it is described in the policy and is a covered risk.
We must not forget about the Deductible Limit. This means that one part of the amount is paid by the insurer, and the policyholder pays the other part.
There is also a maximum amount that the insurance will pay.
Renters insurance generally includes three types of coverage (protection):
- Personal Property
- Liability and Medical Bills
- Additional Living Expenses
Personal Property
Personal Property Coverage can replace your belongings if they are stolen or damaged, but they have to be covered risk in the insurance.
The insurance coverage depends on all your possessions’ value, including furniture, electronics, clothing, appliances, kitchen utensils, towels, bedding, and others. If, for instance, your home was to be destroyed by fire, it would be necessary to have insurance to replace all your belongings.
The most effective method to determine the amount of insurance coverage you need to purchase is making an inventory list (a comprehensive listing of all your possessions, including the value estimates). A current inventory of your home will aid in filing insurance claims faster and more simply.
Liability and Medical bills
Liability Coverage can protect you if one of your guests is injured in your home, and you are blamed for this.
The liability component of a renters’ policy is responsible for the costs of defending yourself in court and the court’s rulings as long as the amount is within limits set by the insurance policy.
The liability limits typically start at around $100,000. Many experts suggest you purchase at least $300,000. You may also buy an Umbrella or Excess Liability policy, which offers more significant limits and coverage.
In general, umbrella policies range from $200 and $350 annually with an additional 1 million in liability insurance.
Your policy also includes No-fault medical insurance. If a family member or neighbor gets injured in your home, you may send their medical bills straight to insurance companies. It is possible to get anywhere from between $1,000 and $5,000 of this insurance. However, it doesn’t pay for your family and pets’ medical expenses.
It also can help you if you accidentally damage someone’s property.
Additional Living Expenses
Suppose your home is considered uninhabitable by some unexpected event. In that case, the insurance will cover the fair and necessary cost increase that you will make to continue living your normal life for up 24-months. The insurance amount includes expenses incurred for the shortest period of the following:
- 24 months.
- The time it takes to fix or replace the building;
- The time it takes to allow your household to relocate to another location.
This time frame is not restricted to the date of expiration of this policy.
Coverage Type Differences
| COVERAGE TYPE | WHAT IS COVERED? | WHAT IS NOT COVERED? |
| PERSONAL PROPERTY | It covers the cost to replace or repair the tenant’s belongings. This includes furniture, electronics, and clothing. Everything is described in the insurance policy. | Personal property over the coverage limit. |
| LIABILITY AND MEDICAL BILLS | Repairs on someone else’s property if you accidentally damage it.Medical bills if one of your guests wants to sue you because of an injury at your home.Legal fees. | Any additional protection that is over the coverage limit. |
| ADDITIONAL LIVING EXPENSES | If your home is damaged and you can not continue living there, this insurance will cover additional living expenses, like a hotel stay. | Damage to the building. |
Personal Property Example
| CATEGORY | CLAIM LIMITS |
| Coins, money, coins, medals, banknotes, gold other than Goldwire, bullion, platinum, silver other than silverware. | 200$ |
| A property that is intended for use or used in a business. | 1 500$ |
| Electronic data processing equipment utilized or designed to be used in business services, like tablets, computers, mobile devices, GPS, etc. | 10 000$ |
| securities, checks, cashiers and traveler checks, money orders, gift certificates, and cards, rechargeable debit cards, phone cards, etc. | 1 500$ |
| Boats of all kinds and outboard motors and their trailers, furniture, and other equipment. | 1 500$ |
| And a lot more which is described in the Insurance Policy. |
What Renters Insurance doesn’t Cover?
Renters Insurance doesn’t cover events like:
- Earthquakes
- Floods
- Your roommate’s possessions
- Sinkholes
- Damage to your car or theft
- Bed bugs and other pests
- Leaking of sewage
Be aware of the many things that policies don’t automatically cover the leaking of sewage into your house and floods, earthquakes, and various other “acts caused by God.” These events could be covered at an additional fee when you believe you’re at risk. Or they are a part of your landlord’s home policy.
Suppose you also own extraordinary expensive or valuable objects like high-end electronic equipment and musical instruments, fine jewelry, or a significant collection of antiques and art. In that case, You may have to buy floating insurance in the form of a rider that covers the value of these objects.
Also, a separate rider could be purchased to compensate for damages caused by winds in particular areas caused by hurricanes.
Renters’ insurance policies cannot cover the losses due to the tenant’s recklessness or intentional actions.
Earthquake and flood damage
The standard renters insurance policies don’t include flood and earthquake damages coverage. Nevertheless, some insurance companies may provide coverage for an additional payment. If you can’t get flood or earthquake coverage with your renters insurance, you may purchase a separate earthquake or flood policy.
Your roommate’s possessions
Renters insurance usually will not cover damages on the belongings of your roommate. The items would need to be covered as a subject on your policy to be covered.
Roommates are not recommended, however, unless they’re married or related to one of them. In addition, adding a non-relative to your policy will give coverage to all the people covered by the policy.
For instance, you have an insurance policy that covers up to $20,000 in the event of damage. You and your roommate would share that insurance for all of your belongings.
Damage to your car or theft
Your rental insurance policy does not protect against theft or damage to your vehicle. However, the belongings in your car during the theft are covered by your renters insurance policy. You’ll need an insurance policy for your vehicle that provides complete coverage.
Bed bugs and other pests
Most renters’ insurance policies will not cover damages related to bed bugs or any other pests, with a few exceptions. Like rodents, they are considered a maintenance problem that is not covered by your policy.
Types of Renters Insurance Polices
The two kinds of coverage offered to renters are the actual cash value and replacement cost.
Actual cash value coverage protects the amount the property was worth when the damage or loss took place and is the cheapest type of renters insurance available.
Replacement cost covers the entire amount needed to replace the item or property with brand new ones. It is around 10 percent more expensive than insurance coverage for cash values.
How to Get Renters Insurance?
You can get your Renters Insurance in a few steps:
- Assess your belongings and insurance needs
- Choose an insurance company
- Start the application process
- Specify your Insurance Policy
- Pay your Insurance Policy
Assess your Belongings and Insurance Needs
When you’re applying for renters insurance, it’s a great idea to take photos of every item you have in your home. For expensive items, be sure to record any serial numbers that can aid in proving the claim.
As it was mentioned, it is a good practice to have up-to-date spreadsheets together with an estimate of the value of each item. While these steps require extra effort, you should take them for two main reasons.
- If you examine the value of each thing you own, you will have a better idea of your possessions` worth. For example, maybe you own around 50 Blu-ray discs. This may not seem enough for you. However, at just $20 per disc, you’ll be accumulating a library worth $1,000, which you don’t need to shell out to replace in fire or theft.
- The insurance company likely will not require the inventory or the photographs when you fill out the policy. The documentation is essential if you need it for a claim, as you’ll be able to demonstrate the worth of your belongings. Keep duplicates of the items you have listed to ensure you don’t lose the only evidence of your belongings. This will ensure you can ensure that all the supporting documents aren’t destroyed as well as your possessions.
Choose an Insurance Company
After you’ve determined what amount of insurance you’ll need and have a plan in place, you’ll be able to discover insurance firms that provide renters insurance policies within your local area. To locate a company, you need to search for renters insurance and the state you live in. Nationwide is a helpful website to find insurance companies separated by state.
Another method is to look for recommendations as well as rates. It is essential to inform your insurance agent of your information source. If you have other policies, they have to receive discounts for families or bundle deals (e.g., when you have purchased a car and home insurance). Once you’ve identified insurance companies you might consider, look up the insurance ratings.
Start the Application Process
After you’ve analyzed your options, it’s time to begin applying. If several companies are good financially, there’s no reason to apply to determine which provides the most favorable combination of affordable rates and good protection.
Certain companies might allow you to finish the entire procedure online. Some may prefer to talk to you over the phone or mail you some documents to fill in. It won’t be necessary to visit representatives in person in most cases.
Specify your Insurance Policy
The application is relatively easy to complete. The only things that may be a hassle are relevant to the building you have, the year it was constructed, and the type of roofing material employed.
If you’re not on the tightest possible budget, it’s best to choose replacement cost insurance. It guarantees that you’re lucky enough to have your sofa destroyed in a fire. You’ll be able to claim the entire $1,000 that you’ll have to purchase brand new furniture instead of the few hundred dollars that your previous sofa was worth because of loss of value. Although replacement cost insurance tends to be more expensive, the increase in cost is typically negligible compared to the vast rise in coverage.
In this stage, you’ll be able to choose the best deductible for your financial needs. Similar to all types of policies, the less your deductible, the greater the rates, since with a lower deductible, the insurance company will have to pay more in the case of an insurance claim. Deductibles range from $500 up to as high as $2,000. If you can increase the amount by $500 – $1000, it could result in a 25% decrease in your insurance premium. Consider the amount you can pay to replace your possessions should you suffer a massive loss, and then make sure you are insured to cover the different amount. The deductible you choose to pay for can be minimal at first, but you can raise it in the future if you need to.
Pay your Insurance Policy
Renters insurance is reasonably affordable. They usually offer significant discounts on the measures you can take to lower the risk for the insurance company. This could include alarms for burglars and fires and fire extinguishers, sprinkler systems, and deadbolt locks on doors outside.
Insurance can be more affordable when you pay for the whole year’s worth of premium in one lump sum instead of in installments. The best option is to do it if you can afford it (insurance firms love to add administrative costs for installment payments). If you go for the monthly options, be aware that certain insurance companies need the automatic withdrawal of monthly funds from your account.
After receiving your new policy through the mail, please go through it. Make sure you double-check that the deductible and premium amount are correct.
How to File A Renters Iinsurance Claim?
If you have to claim renters insurance, here are some suggestions to keep in mind to guide you with the procedure. But, remember that the process for filing claims may differ depending on the amount of the damage.
If an event occurs, immediately contact your insurance company to file the claim as soon as possible.
Keep your possessions safe from destruction. Discuss with your agent the possibility of emergency repairs that could be required.
Your agent will answer any questions you have regarding the damage and address any concerns regarding the process.
Review your insurance policy coverage and limitations with your agent to know the coverage that applies to your particular situation.
Note damaged objects in writing, and then take pictures or footage of any damage before you begin repairs.
F.A.Q. About Renters Insurance Cover
Does renters insurance cover bike theft?
Renters insurance does cover bike theft but with some particularity. A bike is covered under the private property coverage of the renters insurance. But, based on the worth of your bicycle and your limit on deductibles, it may not be the best idea to file an insurance claim.
Does renters insurance cover theft from car?
The thefts of motorcycles, cars, RVs, boats or other motor vehicles are not part of the renters insurance policy. You’ll need an insurance policy specific to your car to protect against theft. But renters insurance could cover items stolen from your vehicle up to the policy’s limits minus the deductible.
Does renters insurance cover food loss?
Renters insurance covers food loss when a covered incident causes an outage in power or damages an appliance. Ask the insurance company to give you more detail about how renters insurance can cover food spoilage.
Does renters insurance cover power outage?
Power outages are not covered by the renters insurance if there is no other damage to the building. These outages are commonplace across the U.S. due to all kinds of severe or inclement weather conditions, and renters and homeowners insurance policies offer limited protection unless there’s actual damage to your house.
Does renters insurance cover temporary housing?
Renters insurance covers temporary housing if your home is declared uninhabitable due to a covered event. Loss of use or other living expenses coverage will pay for temporary housing until you can return to your home or relocate to a different one. The cover is for a maximum period of 24 months.
Does renters insurance cover hurricane damage?
In the case of a hurricane, damages to property that are not caused by floods and caused by hail, wind, lightning, fire, and lightning are almost always protected by a renters’ insurance policy.
Does renters insurance cover hotel stay during a power outage?
Loss of usage insurance usually covers hotels if your home is uninhabitable because of a covered event.
Does renters insurance cover personal injury?
Personal liability protects the policyholder in the event of a legal action caused by incidents within the property that result in accidents that cause injuries, pets at home, or destruction to a neighbor’s private property. The insurance covers a limited amount of medical bills.
Does renters insurance cover carpet damage?
Renters insurance will not cover carpet stains that happen throughout the lease. The security deposit you make could be used to pay the cost of repairs. If any expenses remain after the security deposit is out, you could be accountable financially for the costs.
Does renters insurance cover appliances?
Renters insurance can cover appliances in the event of fire and smoke, theft, leaky pipes, wind damage, vandalism.
