What is Renters Insurance?
Renters insurance, sometimes known as rental insurance, provides coverage for those who rent or lease properties. It’s a form of insurance that offers protection for the belongings inside the property if they get damaged.
Contrary to popular belief, landlord insurance doesn’t cover the renter’s belongings. It simply covers the structures and fixtures of the property itself.
What is Renters Insurance?
Renters insurance provides financial coverage for the renter’s items if they are damaged in fires, floods, or plumbing and electrical faults. It also covers theft and vandalism, and may also protect you from liability if you or somebody else is injured while on your property.
How Does Renters Insurance Work?
Just like health insurance companies, rental insurance provides offers a layer of financial protection that can put your mind at ease.
When you have rental insurance, you can make a claim on your policy if your belongings are damaged or stolen. The amount that is covered depends on the type of loss or damage and the level of coverage on your policy.
There are two forms of coverage that are usually offered by renters insurance companies – Actual Cash Value and Replacement Cost coverage. The former is a type of coverage that reimburses you for the total value of the items that have been damaged or stolen. The latter covers the cost of getting your damaged or lost items replaced.
Make sure to clarify the level of coverage that you have when you sign up for a rental insurance plan. Keep a spreadsheet of your belongings, including their value and which are covered under your policy.
What Does Renters Insurance Cover?
Although every policy is different, most policies cover the costs of possessions that are damaged because of:
- Frozen plumbing systems
- Electrical faults
There are some optional additions that you can choose to add to your renter’s insurance policies. Adding extras will likely increase the cost of your premium but it could save you money in the future if you need to make a claim.
If you’re forced to temporarily move out of your property after it has been damaged in a natural disaster, your provider will cover the costs of renting an alternative property until you can move back into your home.
You may also wish to add medical coverage to your rental insurance. This covers the costs of medical treatment and legal fees if somebody is injured on the property that you’re renting.
Another common addition to renters insurance policies is coverage for the belongings that are kept inside vehicles on the property. If items get stolen from your car, your policy will cover the costs of their total value or the cost of replacing the items.
What Isn’t Covered By Renters Insurance?
It’s important to understand what is and isn’t covered by your rental insurance policy. Here are some of the common exclusions to be aware of:
- Expensive and valuable items, such as jewelry
- Business-related equipment and tools
- Motorized vehicles
If you’re not sure what is covered by your policy, get in touch with your provider and ask for a detailed breakdown of your coverage.