Whether you’re taking out a policy or are just shopping around for the best deal, it pays to know what renters insurance covers and how it works. What is covered? Renter’s coverage protects your personal property in addition to liability losses that could arise as a result of something other than weather-related incidents. Tenants can also get policies that cover both loss of income and lawsuits stemming from an accident at work, if they have one on their record with another carrier.
Renters insurance is a policy that covers your belongings in the case of theft, fire, or natural disaster. It also protects you from lawsuits if someone gets hurt on your property. Renters insurance costs less than home insurance and often comes with discounts for students and people who live in certain areas.
Your personal items are normally covered by a regular renters insurance policy in the event that they are lost, stolen, or damaged. Additionally, renters insurance covers any medical expenses and responsibility in the event that someone is hurt or someone else’s property is harmed. Finally, should your home become uninhabitable, it might cover extra living costs.
How does renters insurance operate then? Let’s discuss what renters insurance is, exactly what it covers, and how much a coverage may cost.
Related: Home ownership vs. renting quiz
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Basics of Renters Insurance
Tenants have access to financial security via renters insurance in the event that anything were to happen to their personal property or that they would become legally liable.
If you rent an apartment, you may believe that your landlord would cover the costs if there is a fire or a break-in during which some of your items are taken.
While a landlord may have insurance in place to protect the building, this insurance won’t pay for your personal belongings in the event that they are lost, damaged, or stolen, or for additional living costs should you need to temporarily relocate while your apartment is being repaired; instead, renters insurance covers these kinds of situations.
Except for the structure, which is the landlord’s responsibility, renters insurance provides identical protection to homeowners insurance at a far lower cost. Some landlords, though not all, demand renter’s insurance.
SolisImages, source of the image.
What Does Renters Insurance Cover?
Standard renters insurance primarily protects against four things.
- personal belongings
- Liability
- Costs of living
- medical bills
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1. Damage to personal property
Your personal items will be covered by renters insurance if they are lost or stolen as a result of frequent occurrences like:
- Theft
- Fire
- Smoke
- Lightning
- Vandalism
- Explosions
- utilities on the property have caused water damage.
- Windstorms
- any additional catastrophes, hazards, or occurrences included in your policy
As previously said, unlike homeowners insurance, a basic renters policy often doesn’t provide financial protection or cover repairs to the building’s physical structure.
Additionally, renters insurance does not cover damage to personal property caused by an earthquake or flood; however, you may get additional insurance or a separate policy to cover both. If you get comprehensive renters insurance, damage and destruction from hurricanes and storms can be covered, but this type of policy usually costs more.
LuckyBusiness/iStock is credit for the image.
2. Obligation
If you, a family member, or, in certain situations, a pet harm or damage another person or their personal belongings, a typical renters insurance coverage will also provide you with financial security. If you are at fault, it could pay for the price of repairing or replacing another person’s property or possessions as well as the cost of litigation up to the policy’s maximum.
If you, a member of your family, or your pet damage your own property, it won’t compensate you by replacing your own items or property.
Consider the following scenario: You are walking your dog when it collides with another dog. There is a commotion, and your dog breaks a neighbor’s fence. In such situation, the fence replacement will be covered by your tenants’ insurance coverage. On the other hand, your tenants insurance coverage won’t protect you if your dog destroys your mailbox while chasing a squirrel while on a leash.
Helioscribe/iStock is credit for the image.
3. Costs of living
Should you become unable to live in your home and need to temporarily move out due to a covered natural disaster like a tornado or another incident or event like damage from a fire or a storm, a standard renters insurance policy can cover the cost of additional Costs of living.
This can include costs such as meals out and accommodations. It could also pay for pet boarding, the cost of doing laundry outside of your home and storage costs. What’s covered would be based on your normal Costs of living and lifestyle.
Ablokhin/iStockPhoto, source of the image.
4. medical bills
medical bills are covered under the Liability portion of your insurance policy. If someone were injured in your home — say a delivery person slips and falls on your premises or your dog bites a neighbor in your apartment building — your policy can cover medical bills or funeral expenses up to a certain amount. On the other hand, if you, your family member or your pet were injured, renters insurance would not cover that.
Unlike the Liability portion of a renters insurance policy, medical bills coverage will pay for medical bills no matter who is at fault.
Andrey Popov/Istockphoto provided the image.
A Claim’s Procedure
Want to make a claim on your renters insurance? The general steps you might anticipate to take are as follows:
- Gather as much information about the event as you can, including what precisely occurred, when and where it occurred, who was involved, and what was damaged or stolen, before filing a renters insurance claim. Take thorough notes and pictures.
- Informing your landlord is the next step. In this manner, they may take care of any structural damage to your home on their end.
- If required, file a police report: You should submit a police complaint if there was any intentional vandalism, theft, or burglary that resulted in damage to your property or the loss of valuables.
- Contact your insurance provider: At that point, you should contact your insurance provider and submit a claim. Usually, this has to be finished in a certain amount of time, like two or three days. As well as all of the information and supporting documentation you’ve acquired, you’ll normally need to supply your policy number. This will make it easier for the insurer to determine what is and isn’t covered. Frequently, someone will stop around to inspect the damage.
- Make any updates if needed: If there were any unexpected or additional costs along the way, such as staying at an Airbnb while your place gets repaired, meals out because you couldn’t use your kitchen or personal belongings you later realized were damaged or missing, then you can update your claim along the way.
Milkos is the photographer.
What Does Renters Insurance Cost?
A renters insurance coverage typically costs $15 to $30 per month, according to the National Association of Insurance Commissioners (NAIC). However, there are a few variables that might affect the price, such as:
- your residence
- Type and scope of protection
- The dimensions and design of your building
- deductible amount
- measures in place for security and prevention
- Any savings
- Your history of claims
Milan Jovic provided the photo.
The Lesson
While not required by your landlord, renters insurance can help cover your personal belongings, additional Costs of living and Liability should there be an incident, disaster or theft your residence. To figure out how much coverage you need, it’s a good idea to take inventory of your items.
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This article originally appeared on SoFi.com and was syndicated by MediaFeed.org.
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement. SoFi offers customers the opportunity to reach the following Insurance Agents: Home & Renters: Lemonade Insurance Agency (LIA) is acting as the agent of Lemonade Insurance Company in selling this insurance policy, in which it receives compensation based on the premiums for the insurance policies it sells. Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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AlertMe
Renters insurance is a type of insurance that covers the personal belongings of renters. It also covers property damage, which is what it primarily does. Reference: does renters insurance cover property damage.
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