Most renters don’t consider insurance to be a top priority. For this category of people, this insurance coverage is almost as useless as booking alien abduction insurance. They don’t want to shoulder this extra cost without necessarily benefiting from it in any way. However, a renter’s insurance policy isn’t a waste of money. It’s a crucial way to protect yourself against financial liability, and most landlords require that their tenants have active renter insurance coverage.
Ask yourself; why do you need renters insurance? Yes, your landlord has most likely insured the entire property. But you probably didn’t know that this insurance package doesn’t offer coverage on any of your parcels. The landlord’s insurance will only cover the structures and common equipment of the building, including any injuries sustained on common property. So, what would you do if;
- Your apartment got burned
- A thief broke into your apartment and stole some valuables
- A guest injured himself in your kitchen
- Your apartment suffers water damage
Today, most landlords will request proof of renters insurance for a specific duration after signing the lease agreement. Therefore, you need to book this coverage for your personal property. Are you interested in learning more information about this special type of insurance coverage? We’ve got you covered. This piece will cover everything you need to know about renters insurance – including its meaning and how it works.
Let’s begin!
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What is Renters Insurance?
In simple terms, renters insurance is a type of property insurance that covers losses to personal property and protects the insured person from liability claims. This type of insurance will cover injuries that occur within your apartment that aren’t due to structural damage. Injuries caused by structural damage or the use of common equipment are your landlord’s responsibility. Renter’s assurance can be booked for different property types, including a studio apartment or mobile home.
Don’t be deceived by what you hear out there. Renter Insurance is relatively cheap and easy to obtain compared with other insurance policies. It doesn’t matter whether you’ve stayed in the apartment for more than a year or just rented the space; opting for this package is a reasonable investment. It’s easy to think that you don’t have anything of value in your home. But how ready are you to replace your personal belongings if a fire outbreak or break-in occurs? Well, you probably didn’t think of that.
Renter insurance is also crucial because it covers any mishaps that occur due to negligence by your neighbors. You may be a careful person, but you can’t possibly keep your neighbors from leaving the gates open, leading to a break-in, or from sleeping off with a cigarette in hand, leading to a serious fire outbreak. While your landlord’s insurance will cover any damages to the entire structure, you are liable for protecting or replacing the contents of your apartment.
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What Does Renters Insurance Cover?
Renters insurance is designed to cover three basic components; personal possessions, liability, and additional living expenses.
Personal Possessions
This coverage will cover the replacement of the contents of your rented apartment. Common perils that may activate this type of cover include theft, fire, electrical faults, vandalism, plumbing, weather-related damage, and so on. For specific coverage, renters can book a standard HO-4 policy that will protect their personal property from damage by the explosion, damaged aircraft, hail, volcanoes, vandalism, and so on. Separate insurance policies cause damage caused by floods and earthquakes.
Liability
The liability coverage protects you up to a certain extent if you get sued for injury or damages suffered by other people during their time in your apartment. It will also cover any damage that you, any member of your household, or your pet causes to others. The full extent of this policy will cover court judgments up to the policy limit at $100,00. In some instances, the policy limit may extend as high as $300,000.
Additional living expenses
In this scenario, you’ll be offered some money to get temporary housing if your apartment becomes inhabitable due to any of the perils covered by the insurance package. This coverage will also include hotel bills, the cost of temporary rentals, hospital bills, and any other bills incurred before your housing unit is fully restored.
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What Doesn’t Renters Insurance Cover?
When booking renters insurance, you should be aware that it doesn’t cover some perils that may affect your living condition. They include; sewage backup into the residence, flood, earthquakes, and any other “acts of God.” If you feel exposed to this type of risk, you can increase your premium to get coverage against them.
Also, the renters insurance will not cover the reimbursement of any expensive or valuable items such as jewelry, art collections, high-end electronics, or musical instruments. You may need to purchase a floater insurance rider to cover this cost. Depending on the region you live in, you may need to buy an additional rider to protect your unit from wind damage caused by hurricanes.
The renters insurance will not cover any damage, losses, or liabilities caused by the tenant’s negligence or damaging activities.
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What’s the Cost of Renters Insurance?
According to information provided by the National Association of Insurance Commissioners during their 2019 rate reviews, it was discovered that most people that held renters insurance packages paid an average of $180 per year. At a monthly rate of $15 per month, this insurance package is one of the cheapest available insurance packages today. The cost of renters insurance coverage may vary according to region, deductible, coverage amounts, and other policy options.
Please speak to your insurance agent to find out the coverage options you can get, including their premium rates and additional policy options. Keep in mind that the deductible amount can greatly affect the policy’s overall cost.
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How to Purchase Renters Insurance?
As mentioned earlier, setting up and purchasing renters insurance is relatively easy. The first thing you need to do is calculate the total cost of your belongings. This cost would give you a good idea of the coverage you need to purchase. Next, please pay a visit to some insurance providers to check the prices of their policies or request a quote online. When you find an insurance provider that matches the valuation of your personal belongings and offers reasonable rates, you can book your policy with them. You may reduce the cost of your renters insurance policy further by booking all your other policies with a single provider.
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Conclusion
And that’s all on how renters insurance works. Do you still feel you don’t need renters insurance coverage? I doubt that. Getting renters insurance is vital protection against financial liability. Whether your landlord mentions it or not, this policy should be one of the first things you look into when you get a new apartment. Take your time to value all the properties and personal possessions in your housing unit. You probably didn’t know it would cost that much. This policy is a great idea because it will reduce the amount you would need to cough up to replace your possessions in case of a mishap.