Renters Insurance

Renters insurance is increasingly required by most land lords. Many people purchase it because they are told it is required, however, it is also a smart idea.

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WHAT IS COVERED WITH RENTERS INSURANCE?

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Personal Property

- All of your belongings. Most renters insurance policies provide a minimum of $20,000 for your stuff. More coverage is always available, and some companies have lower minimums for a cheaper price. Your contents are typically covered for "Named Peril" meaning, unless your policy states it is covered, it is excluded. However "named perils" covers the most likely things:  Fire, Wind, Hail, Smoke, Vandalism, Water damage from burst pipes, Explosion, and Burglary. However, if you are looking for a broader list of perils insured against, ask your agent. Most companies have an "All Peril" option for an extra surcharge.

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Loss of Use

-This is money for you to rent a different apartment includeing deposits, taxes, and fees associated with that if your apartment is unihabitable after a covered loss

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Personal Liability

- This is coverage to protect you against lawsuit. It typically follows you everywhere you go with the exception of auto accidents and business ventures. However, be sure to read your policy, there are a few additional things insurance may not pick up. The most common reason this liability would come in handy on a renters insurance policy would be after a negligent or accidentalfire started by you or your guests that damages the building. Your landlord will have a policy that pays for the building, but it is not uncommon for their insurance company to later "subrogate" or try and re-coop their money from the person whose fault it was. That's where your liability insurance comes in.

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Medical Payments

- This is a "no-fault" coverage that pays for medical costs for guests hurt on your premise. The idea is that if a guest is injured at your place, regardless of fault, you would have a small amount of money to help pay for their copays and deductibles on their health insurance. If they believe your negligence caused their injury, they would have access to your personal liability insurance after medical payments was exhausted.

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Optional Coverages and Features Available

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Identity Fraud Expense

-This coverage is offered by most insurance companies issuing renters insurance policies. Coverage pays for certain expenses that arise out of an identity breach. Investigative costs, attorney and tax advisor fees, re-application fees, and lost wages for missing work to address issues arising from the breach. This coverage does not re-imburse you for the missing funds, but will typically pay the fees for folks helping you attempt to recover them.

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Scheduled Personal Property

-Some items you own may be limited in coverage on a standard renters insurance policy. Jewelry, silver, furs, guns, stamps, securities, musical instruments, antiques, and fine art are also types of special property that typically come with a "cap" in coverage (Many times $1,000 or less). These items are usually more fragile, and are more prone to theft or destruction than other typical household items. To make things more complicated, these items many times have subjective valuations. The answer is to "schedule" these items separately on the insurance policy. Many times scheduling, or telling the insurance company what the specific item is and paying an additional premium to cover it for its value, will grant you the benefits of the item being covered for a broader set of perils, a $0 deductible, and an agreed value for the item. If you have special valuables, talk to your agent.

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Water Backup

- Water backup and/or sump-pump and drain coverage is commonly included on homeowners insurance policies when the home has a basement. It is not typically included on a renters insurance policy, but if you are renting a home with a basement and storing items down there, be sure to ask your agent about this coverage. Most renters insurance policies cover your property for "Named Perils" i.e. Fire, wind, hail, aircraft, riot, damage by vehicle, explosion, smoke, vandalism and malicious mischief. Some polices may include coverage for water damage if it is from a pipe burst, but most types of water damage would not be covered. For extra premium, you may add water backup of sump-pump or drain. If the sump-pump or drain backsup in the basement from a heavy rainstorm and water ruins your personal belongings in the basement, this add-on coverage would pay to replace your damaged items.

 

Personal Injury

-The liability insurance that comes with your renters insurance policy is primarily focused on covering you for claims that your actions or inaction caused bodily injury or property damage to another party outside of an automobile accident or business venture. However, there are times when you cause someone harm that does not qualify as bodily injury or property damage. examples include, lible, slander, defamation, and wrongful arrest. For example, you eat out at a restaurant resulting in a poor customer experience, and you write a review online that prompts the business owner to sue you for your words. This coverage would extend your liability insurance to pay for this occurrence.

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Open Perils Vs Named Perils

- This concept was discussed breifly above, but it's worth elaborating. Most renters insurance policies cover your belongings for "Named Perils" i.e. Fire, wind, hail, aircraft, riot, damage by vehicle, explosion, smoke, vandalism and malicious mischief. There are two main ways policies cover property "Named Perils" (If it is not stated to be covered, it is excluded) and "Open Perils" where unless something is specifically excluded, it is covered. The reason renters insurance policies cover your property as "Named Perils" derives from the fact that renters insurance is essentially a homeowners insurance policy with no building coverage. Homeowners insurance policies usually cover the home for "open perils" and your property inside for "named perils". If you drop the coverage for the building iteself, you are essentially left with only the "named perils" coverage for your belongings. Your agent can change the coverage of you belongings to "open peril" for an extra charge, but this is not standard practice. Be sure to consult with you agent!