Did you know that your landlord’s insurance policy likely won’t cover your belongings or injuries sustained at your apartment? That’s where Renters insurance comes in. In today’s blog, we answer your questions about Renters insurance, including how much you need.
Renters insurance is coverage purchased by an individual who lives in a rental property. Generally speaking, Renters insurance policies tend to cover your personal property, as well as offering personal liability coverage and loss-of-use coverage. Renters insurance only covers certain perils, including things like fire and smoke, vandalism, theft, and wind damage.
Because policies can differ, it’s important to review your Renters insurance policy to better understand what is and isn’t covered. That said, you can break most Renters insurance policies down to three types of coverage: personal property coverage, liability coverage, and loss-of-use coverage.
In the event that your personal belongings are stolen, damaged, or destroyed by a covered peril, your personal property coverage reimburses you up to your coverage limit.
Having liability coverage will protect you if someone is injured on your property and needs medical attention or decides to pursue legal action against you.
If your rental property becomes unsafe to live in due to a covered peril, loss-of-use coverage will reimburse you for the cost of alternative lodging, like a hotel room or a short-term rental.
The personal property coverage of your Renters insurance policy will either cover your belongings at actual cash value or replacement cost value. Actual cash value policies reimburse you based on how much the item was worth at the time of loss, factoring in depreciation. Replacement cost insurance policies would reimburse you based on the amount needed to replace a damaged item with one of similar value.
It depends. A typical Renters insurance policy averages out to roughly $30,000 of personal property coverage, $100,000 of personal liability coverage, and loss-of-use coverage equal to about 40% of your personal property coverage. That said, there are ways to accurately calculate your Renters insurance needs.
Creating a thorough home inventory list will give you a much more precise look at how much personal property coverage you need. Depending on the value of your items, you may even want to schedule endorsements for engagement rings, photography equipment, and other big-ticket items.
Certain lifestyle factors could play into how much Renters insurance you need. If you have a dog, for example, you may want to consider a higher liability coverage to protect yourself in the event that your dog bites someone. The same goes for if you tend to host lots of large parties.
Ready to sign up for Renters insurance? Contact an independent insurance agent today to learn more. In the meantime, check out our insurance blog where we cover everything from what you need to know about umbrella insurance to how to prevent package theft.
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