Your Guide to Renters Insurance

Homeowners insurance is required by mortgage companies and allows homeowners to have protection over their property and belongings in the event the home becomes damaged. But what about people who rent a property? Shouldn’t they have protection for their belongings and protection against liability for property damage? That is where renters insurance comes into play.

What is Renters Insurance?

renters insurance

Renters insurance covers the loss of personal property and protects the renter from liability claims in the event of a damage-inducing event to the home. This also includes injuries that occur in the rental that are not caused by the home’s structure (injuries that are caused by structural concerns are the landlord’s responsibility). Obtaining renters insurance is the smartest decision you will ever make as a renter, especially because it is the least expensive and easiest type of insurance to get.

What Does Renters Insurance Cover?

There are three essential areas that renters insurance covers: personal possessions, liability, and additional living expenses. Personal possessions coverage is for your owned contents of the rental. These belongings are protected from named perils, which typically include fire, theft, vandalism, plumbing and electrical malfunctions, and weather-related damage (not including flood and earthquake damage). The standard HO-4 policy for renters covers personal property losses due to hail, explosions, riots, and damage caused by aircraft, vehicles, and vandalism. Liability coverage protects renters in the event they get sued for injury and damages incurred at the home by other people. This covers court judgments and legal expenses up to a certain amount, which is typically between $100,000-300,000; any coverage over the determined amount requires an umbrella policy. Additional living expenses coverage will provide renters with money for temporary housing due to inhabitable living caused by one of the named perils. This coverage will pay hotel bills, restaurant meals, temporary rentals, and any other costs incurred while the property is being repaired.

house damage

How Do I Get Renters Insurance?

insurance application

When applying for renters insurance, renters should take pictures of everything they own and write down serial numbers that will help verify the insurance claim. Renters should also enter these items into a spreadsheet with the actual or estimated value of each item, which will help in better proving the value of their possessions. This is also important to prevent renters from underestimating personal goods, which in turn, prevents them from under-insuring themselves. After renters have determined how much insurance they will need, they must then choose an insurance company. Gather opinions on local companies from friends, family members, and neighbors and compare rates. Once the renter has chosen a company, they should then start the application process. According to the National Association of Insurance Commissioners, renters insurance will cost an average of about $15 per month; however, these rates vary based on the state, company, and amount of insurance purchased. Once the new policy has arrived in the mail, renters should read it to confirm their coverage and understand what is and is not included in the policy.



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