Disasters strike, and they do it hard with no prior warning. Imagine waking up to a fire, a hurricane, or worse, your roof coming down on you at night while you sleep.
With no warning, how do you protect yourself from such? What if thieves decide to break in and make away with your possessions?
No matter how safe you think you are, your peace of mind is essential, and understanding types of renters insurance is a golden ticket to protecting you from such eventualities. Your landlord has insurance, sure, but it only covers structural damages to their property. Your belongings and where you go after a disaster is entirely pegged on you.
Mortgage companies require homeowners to have homeowners insurance. In the same light, you as a renter requires renters insurance. However, according to statistics, only 41% of renters have renters insurance, leaving many renters in dismay after a disaster strikes.
To protect yourself, linger on what renters insurance is, the types of renters insurance, why you need it, and how you can save yourself some money on insurance for renters.
What Is Renters Insurance?
Renters insurance or tenants insurance is property insurance you as the tenant purchases to cover your house items. The policy covers property losses, liability claims up to a specific limit in case of an incident within the confines of your rental apartment, mobile home, or condo and not from the structure itself. In case the structure brings on the damage, the landlord bears the cost.
With renters insurance, you are covered against fires, theft, plumbing damages, electrical damages, and unusual weather damages such as snow and sleet. Depending on your policy, for example, the standard H0-4 policy may cover renters in case of civil riots, explosions, vehicle or craft damages, volcanoes, and hail. Renters insurance caters to travel luggage as well.
On the flip side, however, insurance for renters will not cover natural disasters, including earthquakes, floods, and what we call acts of God. Your valuables, including expensive jewelry, collectibles, and high-end electronics, will need you to purchase a rider (additional policy) such as a scheduled property policy.
Now with the above understanding, what renters insurance types do you have at your disposal? Well, depending on what the renters’ insurance covers, there are three main types of renters insurance;
- Personal Property Coverage
- Liability Insurance
- Additional Living Expenses
1. Personal Property Coverage
At a glance, your personal belongings may not seem to be worth much, but when a disaster strikes, $35,000 worth of property is not replaced tomorrow, right? But with a personal property cover, an insurance company sets a limit and compensates you in case of eventualities.
As the renter, take inventory of everything you own from furniture, shoes, electronics, and such. Have an estimated price of each item. This information gives a rough idea of how much you are worth and helps decide a proper insurance plan.
Personal property coverage has three policies;
Actual Cash Value
Actual cash value is the real value of your property as of now. Based on your possessions depreciating over time, the actual cash value can be half the initial purchase price, making it less expensive.
Your renters insurance covers the actual cost of the items less its depreciation value. A real downside to this policy is you might not get back everything you lost depending on cost at the time of disaster.
Replacement Cost Coverage
Unlike the above, replacement cost coverage is more expensive. The insurance company offers to replace your damaged possessions as they were before the damages.
Scheduled Personal Property Policy
As mentioned earlier, some items are of high value, including jewelry, collectibles, and electronics. If you purchase a $3,000 policy for renters insurance, it might not cover your $5,000 ring. In this case, the scheduled personal property comes in hardy.
Your firearms, coins/stamps, and travel luggage is part of the parcel too.
2. Liability Insurance
Suppose you hold a party, and amid merry-making, one of your guests is injured? What if your child gets injured during play around the compound?
What happens in case they sue you and make claims? How about the hospital bills? Well, liability cover is your lifesaver.
The policy covers you against legal costs and other damages incurred. A liability insurance cover offers at least $100,000 worth of protection against accidental bodily harms, including damaged property.
Additionally, your standard rental policy cover might deplete while the injured still requires care or their claim supersedes your liability cover. In that case, a personal umbrella policy comes in handy to take over additional costs. Ensure you get to understand such details when sourcing for a policy.
3. Additional Living Expenses
Your rental house is damaged, including everything you own. What happens to you and your family before you bounce back? With an additional living expense cover, you need not worry because your hotel bills, meals, and what you need before your property damage are well covered.
A standard cover will only give about 10-20% of what you need, but with the ALE, you are sure to protect your family and provide for them amidst disasters affecting your livelihood.
When purchasing rental insurance, consider all possible extremes to include the policies that safeguard you almost entirely.
Do These Types of Renters Insurance Save You Money?
Renters insurance premiums depend on several factors: your location, previous claims, the insurance company, deductibles, and any additional coverage.
However, some ways you can save include an increase in your deductibles, bundling discounts where you purchase the car insurance from the same company. Making your payment bills in full as opposed to installments is another money saver. Finally, you can get discounts on security systems like smoke, fire, and alarm detectors
Your peace of mind and your family’s safety are essential. Why not partner with an insurance company that understands your welfare?
Contact us and let the professionals guide you from the beginning on the types of renters insurance that cover your needs.