What Does Renter’s Insurance Cover? This Guide Answers the Question and Many More
If you rent a house or apartment and lack renters insurance, now is the time to make this purchase. This policy offers three types of protection to safeguard you if a covered loss occurs. What should you know when making this purchase?
Renters Insurance Coverage
Also known as tenant insurance, renters insurance pays out if you suffer harm because of a covered peril. The first question many people have when discussing this topic is, “What does renters insurance cover?” The coverage depends in part on which policy you select. However, most policies cover personal property, liability, and additional living expenses losses.
The personal property portion of the policy covers the cost of repairing and replacing covered possessions. The amount paid by the insurer is limited to the amount listed in the policy. Liability coverage pays out if you unintentionally harm a person or their property, and the living expenses portion will cover additional costs if the residence is uninhabitable through no fault of your own.
Coverage Amounts
After asking, “what does renters insurance cover?”, the next question often involves the amount of coverage needed. Coverage limits differ by person, as no two people have the same possessions. Create an inventory of all items owned and determine their current market value. Purchase coverage in this amount and add a buffer to protect yourself if there are any miscalculations in the value of these items.
Insurance companies offer two options. You can purchase a policy that offers actual cash value protection or one that provides replacement cost coverage. Actual cash value refers to the current value of the items lost, while replacement cost means the insurer will cover the cost of replacing the items lost, up to the policy limits.
Does Renters Insurance Cover That?
A standard renters insurance policy may not cover certain items. Jewelry and coins are two examples of items you may need additional coverage for. Talk with an insurance provider to learn how to safeguard your assets, including those of high value. With the liability portion, the insurer is only responsible for any amount up to the policy limits. The remaining balance becomes the responsibility of the renter.
What happens when the home or apartment is damaged and you cannot live in it? The living expenses portion of your policy pays for you to live in a hotel or another rental until the property is restored. Furthermore, if you have additional food costs, the policy helps cover these. Talk with the insurance agent and ask, “does renters insurance cover that?” The agent will be happy to explain what the policy will pay and what remains your responsibility.
Once you have an answer to, “what does renters insurance do?”, it’s time to purchase a policy. Work with a licensed agent to find the right coverage for your needs. With this policy, you have peace of mind, knowing you are covered if the worst does happen.
