For most, renting an apartment or house is one of the many steps between leaving your parents’ house and buying your own. And when you do, your landlord may require evidence that you have renters’ insurance. Or if they don’t, you’ll still want renters’ insurance to protect you and your belongings.
Events like a break-in or a guest’s injury don’t occur every day, but you also don’t want to be caught unaware if it does happen. That’s why renters’ insurance is so important. Your usual renters’ insurance policy covers unexpected events or “perils,” as they’re called. Typically, these policies include three types of coverage: personal property, liability, and additional living expenses.
All three coverages can save you from a great deal of unexpected monetary trouble when you’re renting. Personal property coverage helps protect against theft and unexpected property damage. At the same time, liability coverage can help you from paying out of pocket if you’re found responsible for injuries or damages to other people or their property. Most renters’ insurance policies will also include coverage for additional living expenses. This coverage helps pay for any additional living costs you have because you can’t live in your rented home.
However, renters’ insurance can’t cover and protect from everything. Some common perils renters’ insurance won’t or rarely cover are earthquakes, floods, pests, car damage, and your roommates’ property.
Texas Insurance Agency can help you choose the best renters’ insurance policy. Whether you’re renting an apartment or house, you can rely on our team. Contact us today to learn about your Renters’ Insurance policy options.
Personal Property
When people hear “renters’ insurance,” they’re probably thinking of personal property or personal belongings coverage. This coverage can help cover the cost of damage or loss of your property caused by events like fire, explosions, smoke, vandalism, specific types of natural disasters, and theft.
For example, if your apartment is broken into and your gaming system is stolen, your renters’ insurance can reimburse you for the amount stolen, minus your deductible. However, if your property is damaged by a cause not listed in your policy, you can’t make a claim for it. Two common perils renters’ insurance doesn’t cover are earthquakes and floods.
Personal property includes furniture, apparel, shoes, appliances, kitchen equipment not provided by the landlord, home goods (like bedding or towels), and most sports and hobby equipment (like bikes and art easels). However, certain belongings may be excluded from the policy if they’re above a specific value. The value of items such as jewelry, collectibles, or specialized computers may be too high for standard coverage limits.
Actual Cash Value and Replacement Cost
Some policies give you a choice between “actual cash value” protection and “replacement cost” coverage for your belongings. These types of coverage will determine how much reimbursement you’ll receive if your items are damaged or stolen.
With actual cash value protection, the insurance will cover your belongings up to their current market value, taking depreciation into account. Your premiums will be lower, but you may not be able to buy new replacements.
Replacement cost coverage will compensate you with the amount it’ll take to replace the damaged or stolen items with new ones. However, you’ll have to pay higher premiums.
Renters Liability
Renters’ liability or personal liability coverage is another important component for most insurance policies. This type of coverage helps cover the costs associated with a lawsuit or damages originating on the rental property. These instances can include accidental injuries, injuries from pets, or accidental damage to someone else’s property.
You may not expect a guest to sue you to foot their medical bill when they trip in your rented home, but liability coverage can help shoulder the cost. It can also help you with the associated legal costs, such as hiring a lawyer or paying the required amount for damages to the plaintiff.
Most renters’ insurance includes $100,000 of liability coverage, although the exact limit can be adjusted to suit your needs.
Additional Living Expenses
When you rent a home or apartment, you’re probably expecting to call that place “home,” even if it’s only temporary. However, some events may cause your rented house or apartment to become “unlivable.” If that becomes the issue, additional living expenses (ALE) coverage can help with any associated costs.
When you call your rented house or apartment “home,” you’re probably not expecting that home to be burned down. When that happens, ALE can help compensate the costs for additional lodging (such as staying in a hotel), food, and other living expenses that come with living elsewhere.
Events that can cause your home to become unlivable are similar to those covered by personal property coverage. They include fires, smoke, explosions, theft, vandalism, specific types of natural disasters, and internal water damage (from plumbing or intrusions from a neighboring unit). As with personal property coverage, two common types of damages ALE doesn’t cover are earthquakes and floods, whether from weather or an external source.
Items and Perils Not Included in Renters’ Insurance
There are some property and perils renters’ insurance will rarely or never cover. In the event that one of these examples happens, you’ll need a different type of insurance or fallback plan. Renters’ insurance typically doesn’t cover earthquakes, floods, pests, car damage, or your roommates’ property.
Most renters’ insurance policies don’t include earthquakes or flood coverage. However, they may offer it as an additional add-on or as a completely different policy.
If your property incurs damages from pests such as bed bugs and rodents, renters’ insurance won’t cover the costs. Pest issues fall under faulty home maintenance, which is usually preventable. Since renters’ insurance covers only unexpected issues, it doesn’t include pests.
Damages or theft of your car also doesn’t fall under renters’ insurance. Although property stolen from your car when it’s on a rental property will fall under renters’ insurance, the theft of the car itself does not. Usually, such events are covered on your personal auto insurance instead.
When you rent a home or apartment, it’s not uncommon to have a roommate or two. When you buy a renters’ insurance policy, it typically only covers your property. It won’t automatically extend to your roommates’ items. However, you may be able to name additional beneficiaries of the policy. Otherwise, they’ll need their own renters’ insurance policies.
For more information about renters’ insurance or other insurance policies necessary, call Texas Insurance Agency today.
