Renters Insurance

Renter’s insurance is a means of gaining peace of mind over the belongings within a rental unit, and any possible litigious actions against the tenant from accidents by visitors. Even if the visitor is an uninvited guest, if they injure themselves in the normal use of a rental unit, the tenant can be held liable for the injured party’s medical costs, legal expenses, loss of income, and loss of enjoyment of life, amongst many other possible claims against the tenant. The landlord will have insurance on the structure and the property, but for belongings and liability coverages, renter’s insurance is required.

In Canada, for people on disability, renter’s insurance is mandatory, as it is for people renting subsidized housing units. Different States and Provinces have different requirements when it comes to mandatory renter’s insurance, so make sure that all mandatory insurance coverages are in place before moving into the new residence.

Renter’s insurance will cover the cost of replacing the belongings that have been stolen, lost or damaged. Depending upon the type of insurance policy, either actual cash value or replacement cost, the policy may either pay to replace the belongings with similar models, with no depreciation factored into the claim, or pay what the belongings were worth when purchased, subtracting the depreciation amount. The depreciation amount is the value that something loses over time, as it becomes worth less with each passing year.

When signing up for renter’s insurance, there are many different perils that may or may not be covered, like smoke damage from smokers, lightning or flood damages, water damages (burst pipes, frozen pipes, etc.,) and wind damages to the property. Belongings may or may not be covered if lost or stolen outside of the home. The renter’s insurance policy will explain what you are covered for.

When you stop to think about how much all of your belongings are worth, start with your clothing, and work from there. It is amazing to realize just how much a person’s total clothing is worth, especially when factoring in winter clothing, shoes and boots, jewelery, jackets and even sunglasses. Then, there are the belongings, like computers, IPods, 3-G phones, LCD or Plasma televisions and surround sound stereo systems, cameras and video recorders, and whatever else may clutter up your home.

Without renter’s insurance, the tenant is taking a major chance that nothing will happen to their belongings, or to their rental unit. If there is a fire, or other structurally damaging catastrophe, then renter’s insurance pays for the tenant to stay somewhere else, like a motel or hotel, until either their unit is habitable, or they find a new residence.

Renter’s insurance is, in a sense, peace of mind for the tenant. When gone from the unit for an extended period of time, either for work or pleasure, the tenant does not have to extensively worry about their belongings. If something happens, like a theft or fire, then they will get their belongings replaced by the insurance company, and not need to worry about where to stay until their unit is once again habitable.