Most people renting apartments or homes often do so to reduce the amount of ownership responsibilities and commitment to a particular living space. Although renters can enjoy turning over repairs and problems to landlords, moving with relatively short notice and not having to worry about renovations, one area they should not ignore is renters insurance.
Although most property owners will carry rental or investment property insurance on the physical building and general liability, these policies do not cover individual renter claims. That’s where renters insurance fills the gap.
Personal Property Coverage
Renters insurance covers most of a person’s personal property including furniture, clothing, electronics and home decor with some limits on more expensive items such as jewelry or furs. Be sure to ask about expensive computer equipment. Coverage may depend on whether you own the equipment or if it belongs to an employer and whether you use it for work or leisure.
Most renters insurance policies extend coverage to things that happen outside of your home as well. For instance, if your clothes are damaged in a fire at a friend’s home or your sporting equipment is stolen at a gym, you may be covered or you may need to purchase additional riders. Be sure to ask your agent.
Understand Coverage and Exclusions for Different Circumstances
Basic renters insurance will protect you against fire, smoke, theft or water damage. Policies typically do not cover general breakage. Think about where your rental unit is located and whether you need additional protection. For example, if you’re renting a basement apartment, you may want to be sure your things are covered in cases of flooding.
Basic liability is fairly inexpensive and worth purchasing in case anyone gets hurt in your rental unit. Whether your outside help or a visiting friend or neighbor sustains an injury, liability insurance ensures that you are protected from legal and medical costs.
Coverage for Roommates
Renters insurance will automatically provide insurance for immediate family members, but only two roommates can be listed on a single policy together. Once a policy is signed, claims for either roommate are filed essentially together. Benefit checks are then made out to both parties.
Select the Right Premium and Deductible
Take some time to calculate the cost of replacing your possessions, and that can provide a ball-park figure for coverage. Basic policies can run as low as $15 to $30 per month for standard property damage coverage of between $25,000 to $50,000. Most policies start with a $250 deductible. Opting for a higher deductible will lower your monthly premium while increasing your coverage will raise your costs.