Personal property coverage, protection from liability claims and additional living expense coverage for those living in rented accomodation.
Why do you need Renters Insurance?
When you rent your home you obviously do not need to worry about insuring the building as your landlord is responsible for that. But, the landlords responsibility is limited to the physical property itself. If something happens to your belongings or one of your guests then it's down to you to cover the costs incurred. A Renters policy provides protection against these costs and can even cover your expenses if you are forced to move temporarily if something happens to the property you are living in. Also, some landlords might actually require you to have a renters policy as a condition of the lease.
Renters Insurance coverage types
Renters Insurance typically provides three types of coverage, Property, Liability and Additional Livings Expenses.
The property coverage protects you from the financial burden of replacing your personal belongings due to loss from theft or damage caused by unexpected events such as fire, water damage or accidents. Note: water damage covers things like a broken pipe or leaky washing machine, for protection against flooding caused by a natural disaster a sperate Flood policy would be needed.
There are two types of property coverage. Actual Cash Value insures your belongings but takes depriciation into account, in other words in the case of a loss it would pay out for what they are actually worth now. Replacement Cost Coverage insureres your belongings for whatever it costs to replace them, in other words you get back what you originally paid. If you have an expensive items such as Jewerly or Art then you should think about insuring them sperately by adding a Property Rider to the policy.
The liability portion of the policy protects you should someone get injured while on your property. It also extends outside of your home and protects you from the costs should you accidently cause damage to another persons property or cause an injury to them, and, it covers pets so if your dog bites the neighbour any medical costs would be covered.
Additonal Living Expense Protection
If the worst happened, for instance a fire and you were forced to move out of your home while repairs are carried out then the additional living expenses would be covered up to your policy limits. It will cover things like renting a hotel room, or different property, restaurant meals and any other living expenses you don't normally incur.
Frequently Asked Questions
How much Renters Insurance do I need?
The easiest way to determine how much cover you need is to add up all of your personal belongings based on Actual Cash Value or Replacement Cost and that is the amount of coverage you need.
My Landlord has insurance do I really need a renters policy?
Yes, your Landlord's policy only covers the building, if something happens it will not cover your personal belongings or cover and relocation costs you encounter should you have to move while repairs are being carried out.
Does renters insurance pay my rent if I cant afford to?
No renters insurance will not cover your rent but it will cover temporary housing costs if you are forced to move while your residence is being repaired.