What Renters Insurance normally Covers

Imagine if any of the following happened:  a fire destroyed your apartment building or rental home; a guest fell and broke her hip in your home; or water damage forced you to live elsewhere during repairs.  It is no less than shocking how many renters mistakenly believe their personal belongings and liability are covered by their landlord’s insurance.  Simply not true.  Your landlord insures the building you rent, and it is the responsibility of renters to protect personal possessions and liability for visitors. 

Damages and losses covered by Renter’s Insurance

Think of Renter’s Insurance as an umbrella of financial protection against loss or damage to your personal belongings. Your policy also covers expenses, should you need to live elsewhere while property repairs are made.  Finally, your “umbrella” covers exposure to liability threats or claims due to injury to persons or property in your home. 

Basic property coverage

The standard HO-4 renter’s policy covers personal property losses from clearly-specified threats, including: fire or lightning, windstorm or hail , explosion,  damage caused by vehicles,  smoke  and theft.  Review the entire list of perils covered in the policy you are considering.   Flood and earthquake protection are not part of standard coverage.  If you live in an area prone to flooding, earthquake or wind damage, you may be able to purchase a separate rider. 

Also be certain to understand the type of reimbursement calculation your policy allows.  There is a considerable financial difference between actual cash value versus replacement cost.  The first reimburses you for the value of your belongings at the time of loss, taking into consideration the original cost, age and expected life of your property.  Replacement cost coverage covers the actual cost to replace your lost property, minus your deductible.  If your company traditionally writes ACV coverage, find out if you can purchase replacement cost coverage. 

Additional benefits

Living expenses – When catastrophe makes your home uninhabitable, your policy will cover expenses for living elsewhere, while repairs are made.

Liability protection – Should someone be injured or their property damaged in your home, you will be covered for costs incurred and potential court judgments and legal expenses up to the limit of your policy coverage. 

Valuables and collections:

Your renter’s policy limits overall compensation for certain categories of belongings, such as jewelry, antiques and electronics.  If you have valuable items, ask your agent about purchasing riders to cover losses above the standard policy limits for those items.  

Off-site protection – Your policy may cover risks you had not considered, such as theft of property from your vehicle or while you are on vacation.

To protect your financial health, it is important to understand damages covered by your policy and to choose the best options that will provide affordable coverage with the kind of financial risk you are willing to face.