Spotlight On: Renters Insurance

If you are not a homeowner, you may wonder if you really need insurance coverage. Discover how helpful a renters insurance policy can be.

What Does a Renters Insurance Policy Cover?

If you aren't a homeowner, you may wonder if you really need insurance. Many people assume that their landlord's insurance policy covers their belongings, even though it only covers the building. You'll actually replace your belongings yourself in case of fire, damage, or theft. Discover how helpful a renters insurance policy can be.

Basic Coverage

Renters insurance typically covers the following.

Personal Property

The policy covers your belongings against various events out of your control. Such perils include fire, riots, short-circuiting, theft, explosion, lightning, and hail. Check the losses potential insurers cover when you shop around for policies. Most insurers don't cover earthquakes or floods, and you have to get additional policies for these events.

The insurer covers the cost of damaged property up to policy limits. For instance, if your deductible is $1000, and you lose $2500 worth of possessions, your insurer covers the remaining $1500. Therefore, take stock of your belongings to ensure that your policy is adequate.

Keep in mind that insurers cap coverage for some items like electronics and jewelry. Add-on riders may be necessary for high-end electronics, firearms, ATVs, snowmobiles, fine art, and other specialty items.

Liability Coverage

A standard renters insurance policy offers personal liability coverage. This coverage protects you if someone brings a claim against you for events that caused them bodily injury and property damage. For example, a guest who falls down your stairs or trips over an extension cord can sue you for medical damages.

If your dog bites a jogger, neighbor's kid, or visitor, this coverage covers the medical bills. However, your insurer may exclude certain breeds, like pit bulls. Check with your insurer or agent if the policy covers your pet.

Renters insurance also meets the legal costs if anyone sues you for bodily injuries they acquired in your rental unit. However, the policy doesn't cover intended bodily injuries or property damage. Hence, you're liable for repair costs if you throw baseballs through a neighbor's window to cause damage.

If you run a business from a rental unit, get a business owner's policy to cover third-party medical bills. For example, the food you cook in the rental unit can make someone sick, and you'll be likely liable for their medical costs. Also, the policy doesn't cover damage that your vehicle causes, although your auto insurance can usually protect you.

Additional Living Expenses

The coverage meets the extra expenses you incur if certain events, such as a fire, temporarily displace you from your rental unit. For example, if a tornado renders your apartment uninhabitable, you have to seek alternative housing.

The policy covers hotel bills and extra costs such as restaurant meals since you can't cook in your house. Other costs include pet boarding fees, laundry costs, storage payments, and furniture rental. 

However, the insurer assesses your usual living expenses against what you have to pay due to the displacement. Most insurers pay for the expenses as you incur them, so you should keep records of each expenditure.

Supplementary Coverage

In addition to the basic coverage, your insurer can customize your policy with endorsements like the following.

Debris Removal

The insurer can cover the costs of removing debris from your condo or apartment after a covered event.

Replacement Cost Coverage

A standard renters insurance reimburses you the actual cost of a lost or damaged item. Under replacement cost coverage, your insurer covers the cost of replacing lost possessions with new ones. 

Collections Coverage

Consider this endorsement for your prized collection of memorabilia like comic books and baseball cards. An appraiser must value your collectibles for the insurer to cover the stated value.

Renters insurance protects your assets even if you aren't a homeowner. At The Philadelphia Contributionship, you'll find an affordable policy that covers your valuable possessions. Get a no-hassle, customized quote today.