Definition of Renters Insurance

Even when you rent a home, you want to make sure you have an insurance policy to protect your items. If you have never considered obtaining renter’s insurance before, it is time to take a look. Some people think they don’t need it; their stuff isn’t really worth that much. The fact is your landlord’s insurance policy doesn’t protect you.

Did you know approximately 2/3 of people living in rental properties do not have renter’s insurance? Unfortunately, some people don’t find out they are not covered by the landlord until they are reporting a break in or dealing with their losses from a fire. Usually the landlord’s policy only covers the building’s structure unless the loss was due to the landlord’s negligence. If that were the case, it would need to be proved in court. The landlord’s policy will definitely not cover your personal property.

Renter’s insurance will provide protection against personal property loss and liability coverage. Your renter’s insurance policy will describe what perils are covered within the policy, but typically cover catastrophes such as fire, water damage, and theft.

Don’t make the mistake of saying your belongings aren’t worth getting insurance. If you look at all your belongings, like your television, computer, furniture, and even your clothes, it may all add up to more than you think. It could possibly add up to $10,000 or more. If you lost all your belongings in a fire or a robbery, could you afford to replace all your personal property out of pocket? Most people would not have the funds available to do so. With renter’s insurance, your personal property would be protected against named perils.

There are two types of renter’s insurance policies to consider. Actual cash value insurance will reimburse the depreciated value of your destroyed or lost possessions. This means if you lost a $3,000 television and it was only worth $1,200 today, the policy would give you $1,200. Premiums on an actual cash value policy tend to be lower than the replacement cost policy. Replacement cost policies would cover the actual cost to replace your lost or destroyed property today. So, if you lost that $3,000 television, you would get today’s replacement cost for the same or like television. The key to making the right decision on policy type is to consider your belongings.

Your renter’s insurance will also provide liability protection. Liability protection will help if something happens to someone in your home. For example, if a friend that was visiting slipped and broke a foot, you would have protection if they decided to sue you. You would have protection up to your liability coverage on your policy.

A recent study showed that 2 in 3 young adults did not have insurance protection for their rentals. When there is a possibility of any type of catastrophe, having renter’s insurance will give you the best protection. It doesn’t cost too much either with policies starting at about $12 per month.