Broker Check

If You Rent, Cover Yourself

| June 11, 2018
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Many people who rent may assume that damage to their personal items will be covered by a landlord’s insurance should their rental property fall victim to a fire, theft, explosion, or other disaster. Renters are often dismayed to learn that landlords insure only their own structures, not the belongings of their tenants. 

As a result, renters without insurance may be carrying much more risk than they think. In addition to their personal possessions being at risk, their financial security could also be jeopardized in the event of a lawsuit. 

Renters insurance typically covers loss or damage due to theft, vandalism, smoke, fire, explosion, windstorm, lightning, and faulty indoor plumbing. Categories of coverage usually include the following: 

  • Personal Property. Such property consists of your clothing, jewelry, furniture, electronic equipment, appliances, bicycles, and any other items you bring into the apartment. Be aware that most policies have a coverage limit on particular items (e.g., jewelry or computers), but further coverage may be available at an additional cost. Also included under personal property is protection for your belongings when they are away from the apartment. For example, if your dry cleaning were stolen from your car or if your luggage was stolen at an airport, you would be covered. It is important to note that there is a 10% limitation on this off-premises coverage if the loss occurs at another residence such as a summer house. 
  • If you added paneling or wallpaper to a rented house or apartment that was subsequently damaged in a fire, your policy could cover that damage. 
  • Loss of Use. If damage to the building in which you rent renders it unfit for living, your policy could pay for temporary housing, and it may also cover such items as food and laundry costs. 

In addition to covering damage to your property, renters insurance can also provide liabilitycoverage for personal injuries and property damage that results from your negligence. For example, if someone slips on your wet kitchen floor and sues you for damages, the liability portion of your policy may cover potential damages. 

Although individual policies can differ, a basic policy (say, with a $250 deductible) might cover $15,000 worth of personal items, $100,000 per occurrence for legal liability, and $1,000 for medical expenses without fault. Coverage limits can be expanded to suit your particular needs. 

Standard policies generally cover property loss in excess of deductibles on a “cash value” basis, which is the cost less depreciation. For a higher premium, you could obtain “replacement cost” coverage, which pays the full cost (minus the deductible) of replacement. 

If you are renting, it is important not to undervalue your personal belongings or underestimate your potential liability exposure. Comparing the risk of being uninsured to the relatively modest premiums of most renter’s policies may prove renters insurance to be a valuable bargain. To ensure you are properly covered, give your insurance agent a call today.

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