Renters insurance is valuable because it allows you to get hundreds of thousands in coverage for less than $20 per month. The policies are even cheaper when you merge them with your auto plan. More details on that will follow in this simple guide to renters insurance coverage. Yet for these very reasons, many policyholders forget about their plan and let it lapse. Unfortunately, the problem doesn’t stop here.
According to the Federal Bureau of Investigation (FBI), the average burglary costs the victim more than $2,400 in losses. During 2018, burglars stole and/or damaged $3.4 billion’s worth of belongings and property. Accidents are also harmful. For instance, between 2013 and 2017, residential fires inflicted almost $7 billion on households in “direct property damage.” Cooking equipment, heaters, and faulty electricity/wiring cause 73% of these strategies. The National Fire Protection Association (NFPA) highlighted this in a report that they published in 2019.
Some people may be thinking about getting rental insurance, especially because it covers all of the above. Others could have had a policy in the past, but they let it lapse. If you currently have one, that’s a scenario to avoid. For a start, the average insurance plan only costs $17 per month. This guide to renters insurance coverage will outline the factors that make these policies worthwhile. In fact, we even highlight the ones that most insured consumers don’t even know about. To give an example, your coverage entails accidents in restaurants, malls, and grocery stores.
A Simple Guide to Renters Insurance Coverage: Property, Liability, and Emergencies
Renters policies cover both the owner and their household. Keep in mind, though, that this doesn’t extended to non-relatives who live with the insured, such as apartment roommates. Other than that, almost every renters insurance policy applies to three key areas.
Property and Personal Belongings
Your renters plan protects your items in the event of a flood, fire, or burglary. For example, if someone breaks into your house and steals the TV set, the insurance policy reimburses you for its cost. Moreover, the coverage pays for the related damages, including any broken windows or destroyed furniture. To clarify, here are some personal belongings that your renter’s policy covers:
- Bicycles, kayaks, and outdoors items
- Electronics (laptops, computers, smartphones, …etc.)
- Furniture and appliances
- Jewelry and valuables
- Windows, doors, and flooring
It is important to note that consumers should get enough protection based on the value of their belongings. The typical renters insurance policy covers $20,000 or less. However, the belongings in a two-bedroom apartment, let alone a house, are worth $30,000 on average. Many insurance providers will increase this area of coverage when policyholders ask for additional protection. Therefore, households that own more than the default $20,000 should highlight this point to the insurance agent or company.
Your renters insurance coverage also applies to guests and affiliates who visit your home. For instance, a college student owns a policy on their apartment. One day, they invited their friends for dinner. When the group started to cook, a guest got severely burnt. This is because the host didn’t properly clean the oven. Firstly, the insurance company takes care of their guests’ medical bills, such as the ambulance, hospitalization, and ongoing treatment.
Secondly, let’s assume that the injured guest filed a lawsuit against the apartment resident. In this scenario, the renters insurance plan pays for the policyholder’s legal expenses, attorney fees, and most (if not all) of the lawsuit’s cost. Having said that, liability coverage has certain limitations. That is to say, the insurance company doesn’t protect roommates and other residents (apart from family and dependents). In our example, the roommate would have had to pay for the lawsuit’s costs if they, not the policyholder, invited the friend.
Most of the time, providers give you $100,000 in liability coverage. Yet you always have the option to increase and decrease the amount. Keep in mind that the premiums also become more and less expensive, respectively. Just as importantly, consumers may mix between their property and liability coverage amounts based on their preferences. For instance, when you have a lot of expensive belongings, you could get additional property protection and reduce your liability insurance. As a result, your premiums stay the same.
Emergencies, Floods, and Fires
Certain events and disasters might make your residence unlivable. Amongst them are fires, broken-down water pipes, and collapsing structures. When this happens to policyholders, the renters insurance will pay for their new/temporary housing (such as a hotel). If the damage is irrecoverable, the insurance company takes care of the moving expenses, including storage units and rental trucks. This, of course, is in addition to the personal property and liability protection.
Your Guide to Renters Insurance Coverage Outside the Home
Policyholders retain their coverage even when they’re away from the apartment or house. Moreover, this applies to all three protection categories. For example, when a thief breaks your car’s window and steals a laptop bag, the personal property coverage kicks in. The insurance provider compensates you, as the policy holder, for the cost of your device and any other stolen items. Yet renters coverage doesn’t apply to vehicles. In other words, the insurance company doesn’t pay for the window repairs. They also don’t compensate you for the value of a stolen car (apart from your belongings).
As far as liability coverage is concerned, it follows you to work, restaurants, and stores. To illustrate, let’s assume that a policyholder accidentally placed their bag-pack several feet away from the table. After that, a waiter slipped over it and suffered a serious injury. Liability insurance may ruminate the waiter for the medical costs and protect you from a subsequent lawsuit. However, this depends on the policy provider and the type of renters coverage that they offer.
Is It Worth It?
Either way, almost every company will cover the three main protection categories. The deductible (i.e. how much you pay) may vary from one policy to the next, although this is common with all types of insurance plans. Moreover, the deductible is minimal in comparison to your belongings’ value and/or any legal and medical costs that you could be liable for. The emergency, fire, and flood coverage is just as worthwhile, even more so for $17 per month.
Whether you have an existing plan or want to get a new one, this simple guide to renters insurance coverage gives you a good place to start. In short, determining how much protection you should have fills the first half of the cup. The second part lays in maintaining the coverage, especially because you never know when you will need it the most.