Renter’s insurance is for anyone who rents an apartment, house or owns a condominium. It may be the most undervalued protection renters dismiss. Renters should never assume their belongings are covered by their landlord.
Your landlord’s or condo association’s insurance more than likely only protects the building, land and physical structures. Your belongings are not covered.
Renter’s insurance can also protect you from legal issues. What if an injury occurs inside your apartment to someone visiting you? You cannot count on the landlord’s insurance covering you in this instance. Renter’s insurance will cover the injured party’s medical and legal expenses or damages in connection with the injury.
3 Top Reasons you need Renters Insurance
Theft of personal property such as your computer is covered by renter’s insurance. Renter’s insurance may also cover belongings stolen from your car or storage facility. USAA Renters Insurance covers these losses, as well as things other insurers don't — like coverage for items lost in transit or while in storage.
Damage due to fire, wind or vandalism is covered by most renters insurance. Utility malfunctions mainly plumbing and electricity is covered. Renter’s insurance even covers some weather related damage.
Personal liability for accidents of others on your premises is another benefit of renters insurance. Your landlord's policy most likely excludes liability for something that occurs inside your rented resident, leaving you liable for injury to another person or damage to another person's property if an incident occurs.
How Much Coverage
The amount of coverage you need really depends on your belongings. For some renters a few thousand dollars will be sufficient. Others may need $25,000 or more. It is important to determine the value of your possessions and use that as guide when estimating the amount of insurance to purchase.
A good idea would be to inventory your belongings including valuable possessions such as artwork, jewelry, electronics, furniture, appliances, photography, or stereo equipment; and, take photos and keep receipts.
Should you ever have to make a claim; your inventory will enable you to get the full value of your belongings.
Renter’s insurance is fairly inexpensive to purchase and worth every penny. The average renter can purchase complete coverage for $100 – $250 per year, depending on where he or she lives.
Replacement Cost vs. Actual Value
There are two main types of renter’s insurance, replacement cost value and actual cash value. It is recommended that you purchase a replacement cost value policy. A replacement cost value policy typically covers what an item would cost to replace at current market value.
With an actual cash value policy, you would be covered for the initial cost of an item minus depreciation. For instance, if your laptop is 2 years old, you know there are newer models on the market and your model may not be worth what you originally paid.
Under an actual cash value policy your laptop’s value would be depreciated and the payout would be less than current market value. You may have to come out-of-pocket to fully replace the item.
While not all hazards are covered by renter’s insurance, the reasonable cost of carrying it is worth it. Make sure you know what hazards your policy covers up front so there will be no surprises. Keep in mind any hazard not specifically listed in your policy will not be covered.
Renter’s insurance also only covers the policy holder. Therefore, if your roommate does not have renter’s insurance, they are not covered by your insurance. Your possessions will be covered, but unless your roommate is specifically listed on the policy, they will not be covered.
Most renter’s insurance will allow roommates to get a single policy that will cover all inhabitants and possessions in the apartment but the policy must specifically designate everyone who is covered.