Types of damage and loss usually covered by renter’s insurance

Renter’s insurance coverage protects the personal belongings of tenants from damage or loss as a result of events such as fires, floods and theft.  Rental insurance policies include liability coverage, which protects the tenant from damage to adjacent property, such as a neighbor’s property, as a result of a flood or fire in the tenant’s home. Tenants are also protected from liabilities resulting from injuries to other people while they are within the tenant’s premises. Renter insurance covers damage and loss that results from about fifteen different types of events including: Fire, theft, vandalism, water related damage, wind storms or hail, explosions, civil unrest smoke, Ice, snow or sleet, electrical surges, falling objects, vehicles, aircraft, volcanic eruptions and glass from the building.

Damage to personal property resulting from hurricanes, tornadoes, floods or earthquakes are not covered by renter’s insurance. Expensive items, such as jewelry, antiques and memorabilia, may be covered, and if covered, are covered up to a stated limit. However, expensive personal items should be covered through the purchase of riders. Riders alter the terms and conditions of insurance policies and customize the policy for the specific insurance situation or need.

Renter’s insurance does not cover structural damage, such as damage to the roof or walls of the building. Damage to the building is covered by the landlord’s property insurance and is not the responsibility of the tenant.

Two basic types of renter’s coverage can be purchased. Policies that cover the Actual Cash Value (ACV) of the item lost or damaged. The insurance company pays the fair market value of the items at the time of the claim; hence the insured is usually reimbursed at a lower rate than the original price of the item. Replacement Cost Coverage (RCC) is the second type of policy, RCC covers the replacement value of the item, hence the insured is fully reimbursed for the cost to replace the item with an identical or equivalent item. The premiums for RCC are higher than the premiums for ACV coverage; however, RCC pays out more dollars per claim than ACV for the same item.

In the event that a tenant’s residence becomes uninhabitable as a result of a fire or flood, renter’s insurance will cover the cost for the tenant to live somewhere else on a temporary basis. Temporary rental expenses covered depends on the specific policy purchased. Most policies limit the payout for temporary housing to a percentage of the policy value, a limited length of time or 12 months.

Renter’s insurance premiums vary, depending on the value of the items insured, the neighborhood the property is in, the deductible selected and the age of the property. Discounts on premiums are available for older citizens and also for individuals who bundle their insurance policies by buying more than one policy from the same provider. Renters with home alarm systems, fire extinguishers, sprinkler systems and dead bolts on exterior doors can also get discounts.