Did you know that only 37% of renters have renters insurance?
That's a problem, considering what renters insurance can do to protect you. The thing is, plenty of people think they're covered by their landlord's policy, or they dramatically underestimate the value of their belongings, both of which are serious mistakes.
Here, we're walking you through the basics of renters insurance in NC, why finding it in NC is a bit of an adventure, and what we can do to make the process easier for you.
What is Renter's Insurance?
First things first: what is renters insurance?
Along similar lines as homeowners insurance, renters insurance is a variety of property insurance designed to protect you against losses to your personal property and losses resulting from liability claims.
Many people believe that they're protected under their landlord's policy, or that their landlord will cover property damages because they're a renter. Neither is true.
In fact, many landlords require proof of renters insurance before they agree to rent to you since their property insurance won't cover your losses.
Let's put it this way: if the building you lived in burned to the ground tomorrow, the landlord's property insurance would cover the building itself. Everything in the building that belonged to you is your problem, not theirs.
This is why renter's insurance is so vital when it comes to protecting your property. But renters insurance is about more than just protecting your stuff.
A typical policy includes four areas of coverage:
- Personal property
- Personal liability
- Medical payments
- Loss of use
So really, your renter's insurance policy is less about protecting your belongings and more about protecting you.
That said, renter's insurance goes a long way towards protecting your personal property.
This can be especially important if you live in a rental property where so many factors are out of your control. For example, if you've got impressively lousy upstairs neighbors who flood your apartment, your insurance will reimburse you for the damages to your property up to a certain named amount in the policy.
Covered items under the personal property section include things like:
- Collectibles and art
- Higher-end cameras
- Musical instruments
- Sports equipment
- Camping equipment
Essentially, if it's a valuable item, it's worth protecting under renters insurance.
Keep in mind, though, that there are often category limits on certain high-priced items like engagement rings or other expensive jewelry. That's why it's important to read the fine print on your policy to make sure you have enough coverage if those items were damaged or lost.
Then, there's the question of personal liability, which is also covered under renters insurance.
Much though we don't like to think about it, the truth is that accidents happen. If you're on the hook, those accidents can get expensive fast. Like, say, if you set the apartment on fire and get sued by your neighbors and landlord.
Assuming you won't be completely bankrupted by the legal process, you'll be paying back that debt for years to come.
You see, renters insurance isn't just about protecting your stuff from accidents that aren't your fault. It's also about protecting you from lawsuits if accidents are your fault.
The standard North Carolina renters insurance policy covers about $100,000 in personal liability, though you can purchase policies with a higher coverage amount. As a rule, the more you stand to lose (i.e. the more you earn and the more valuable your stuff is) the more coverage you need.
At this point, you should be noticing a trend with renters insurance--it has an awful lot to do with covering accidents.
Even if a person doesn't formally sue you, its expensive for someone to get hurt in your home. That's where renters insurance can save you--coverage for medical payments will cover up to $1,000 in bills for the injured party.
It won't cover major surgical operations, but it can cover the necessaries like an ambulance or emergency treatment.
Keep in mind: renters insurance isn't a replacement for health insurance, as it's only designed to cover basic medical bills if someone else is injured on your rented property. It won't cover your own medical bills.
Loss of Use
Finally, there's loss of use coverage.
Let's go back to our previous scenario--your lousy upstairs neighbors flooded your apartment and you can't live there while your landlord is getting the place fixed.
Those repairs could take a while, and it's expensive to cover a hotel in the meantime.
Enter renters insurance, which can help pay for a place to stay while you're waiting for repairs to finish. It won't cover the whole cost, but it can certainly take the sting out of it.
What's Not Covered
Now that you know what is covered under most renters insurance policies, let's talk about what's not covered.
Renters insurance policies can be oddly specific in what they do and don't cover. It will, for example, cover fire, smoke, and lightning, but it won't cover earth movements (earthquakes, sinkholes, etc.) unless those earth movements cause a fire or explosion that damages your property.
Water damage is also an odd, tricky beast in the world of renters insurance. If your pipes burst, you're covered. If a storm breaks your windows and causes rain to pour in, you're covered.
But if your property damage is the result of flooding (even if the storm is at fault) you're not covered--flooding is under the purview of flood insurance, which is a different policy altogether.
Why Finding Insurance is Hard in NC
With all of that in mind, let's talk about why finding renters insurance is a little tricky in this fine state of North Carolina.
First, the state board sets the rates for what North Carolina insurance policies can charge. This seems like great news for people buying the policy since the insurance company can't charge them their left kidney to cover their grandmother's necklace.
In reality, this means that the cost of the policy isn't equal to the amount of coverage offered. So, insurance companies can either take a loss on every person who buys the policy in North Carolina, or they can opt out of the North Carolina market altogether.
It works out alright if you have bundled insurance, but if you don't have bundled insurance, you're in a tight spot.
There's also the fact that North Carolina is partially a coastal state. Insurers can't change their coverage based on the geographical area in North Carolina and offer only inland or only coastal coverage based on where you live. It has to be universal, which presents a unique challenge in writing insurance policies.
Finding Renters Insurance in NC
That said, finding renters insurance in NC isn't impossible, especially if you know where to start looking.
We at Amistad Insurance Services take pride in offering affordable coverage to North Carolina residents--our renter's insurance policies start at just $7 a month.