Are you covered as a Renter?
Many people mistakenly believe that their personal belongings will be covered by their landlord’s insurance policy. Actually, your landlord’s policy is designed to cover the building structure and the landlord’s personal property used on the building premises. If you are renting, you need renter’s insurance. To better understand the benefits of this type of insurance, we will look at three components.
Personal Property Coverage
Over time, we accumulate a lot of possessions. If a fire, tornado or even a theft occurs, we would generally want to replace most if not all our belongings. However, that may be impossible if we have to do that out of pocket. You might be surprised at how much you have acquired in a short period of time.
Several years after my wife and I married, we made an international move. We wanted to take our clothes, precious personal effects and household items instead of buying them again. I would say that we did not take half of our things. However when we filled out a replacement cost inventory for the moving company’s insurance, we had over $25,000 listed. In our day and age, $25,000 in personal property is not a large amount. Can you replace that out of your savings?
Putting together a home inventory can give you a solid number for your personal property limit. When doing your inventory, pay special attention to the value of jewelry, furs, antiques, art, collectibles, firearms, sport equipment and musical instruments. Generally, these items have limited coverage under a renter’s policy; many items may be limited to as low as $1,500. Ask your agent what the sublimit is for these items. If it is lower than what you have, consider adding a floater to your policy. You will want to schedule each item with a limit to give you broader coverage.
Another aspect of personal property coverage is off-premises coverage. If you have valuables stolen out of your car or hotel room, while traveling, it can be covered under your renter’s policy.
Personal liability coverage is also another aspect of this policy. Just like a homeowner’s policy, it will protect you against lawsuits for bodily injury or property damage as well as legal fees. It covers injury and damages caused by you, your family and your pets. Dog bites happen to be one of the leading causes of lawsuits against homeowners and renters. This liability is also valuable to the renter in protecting against damage to others or the landlord in the event that you would cause fire or other property damage or bodily injury to the property you are renting. In our local area last year, the majority of apartment fires were directly attributed to negligent acts of a renter.
Make sure you consider both your current financial risk as well as future financial risk when determining the best liability limit for you. You should also discuss an umbrella policy with your agent to see if you should consider that too.
Living Expense Coverage
One overlooked benefit of a renter's policy is living expense coverage. Let’s say you are 4 months into your lease and a fire occurs causing smoke damage to your apartment. You will need to stay in a hotel for several weeks while your apartment is repaired. You are probably still going to have to pay your rent during that time. You will also have to pay for a hotel and extra expenses on food because you can’t cook. The living expense coverage will help cover the hotel and the extra cost of food during that time.
If you are renting your home, you need renter’s insurance to cover your personal property, liability and extra living expense you can incur during a loss. Most companies offer multi-policy discounts if you bundle your renter’s policy with your auto insurance. Get more information by contacting one of our advisors now.