If you rent a home or apartment, chances are you may not have thought too much about what insurance to buy. After all, you don’t own the dwelling that you rent, so there is no need to cover it. This is true, but the dwelling itself isn’t what you should be concerned about.
As a renter you still have belongings that could be lost in the event of a fire or theft, and you still have most of the same exposures that home owners do. Let’s take a look at what renters insurance has to offer:
Renters Insurance Covers Your Stuff
When you rent, the structure in which you reside is likely insured by the owner, whether it is a person, corporation or association. This coverage only extends to the structure, and does not extend to any contents of the structure that may be owned by you.
In the event of a fire or break-in, your landlord’s policy will only pay for repair or replacement of damage to the structure. Your belongings would not be covered, so it’s important that you have renters insurance to replace your items.
Renters insurance covers anything that is owned, used or worn by you or someone in your family that resides in the home. This includes your furnishings, dishes, clothing, books, etc. There are usually incremental limits for this coverage ($10,000, $25,000, and more). Your broker can help you select the limits of coverage that are right for your family. Please note that there are sub limits for some categories such as electronic equipment, firearms, jewelry and fine arts. Be sure to discuss with your broker whether the sub limits included in your policy will cover your special category items.
What About Additional Living Expenses?
What would you do if your apartment was damaged in a fire and repairs could take a few months? Where would you go? And what if your new temporary apartment or hotel cost more than what you were paying in rent?
That is where Additional Living Expenses (ALE) coverage comes in handy. Should your place of residence become uninhabitable due to a covered cause of loss, ALE will cover expenses (up to a scheduled amount) to maintain the normal standard of living until repairs or replacement have been made. This coverage may include hotel or other temporary rental placement for the family, among other expenses.
You Need Comprehensive Personal Liability Insurance
Think of Comprehensive Personal Liability (CPL) as your prepaid legal account. CPL is both premises liability for your residence (in case a visitor injured in your home decides to sue you) and personal liability for you and your family away from home, whether you are walking your dog two blocks from home or playing golf on your family vacation.
A good rule of thumb for comprehensive liability is the more the better. You can even purchase this coverage as a stand-alone policy if you so desire.
Medical Expenses Coverage
Medical expenses are the renters insurance version of no-fault coverage. If a visitor is injured in your home and the medical expenses are minimal, medical expense coverages will pay for his doctor bills, and might even keep him from suing you! Keep in mind that there are limits to this coverage per person and per accident, usually $5,000 or less. Talk to your insurance broker about the limits that are right for you.
What Isn’t Covered
Every renters insurance policy has exclusions, of course. The two main hazards that should you should be concerned with are flood and earth movement (earthquake). Neither of these are covered under a standard renters policy, and should be purchased separately. Your broker should provide quotes for these hazards with your renters insurance policy quote.
These are just the basics of renters insurance policies, but there are many ways to customize this coverage to fit your needs. An annual insurance checkup with your broker is a good way to be certain that you have the proper coverage for you and your family.