Your renters insurance guide


What to look for when shopping for renters insurance

Renters insurance protections

Similar to homeowners insurance, renters insurance offers three essential forms of monetary security:

  • Coverage for personal possessions
  • Liability protection
  • Additional living expenses (ALE)

The main distinction is that renters insurance does not cover the apartment’s building or structure; the landlord is responsible for that.

When looking for renters insurance or discussing your needs with an insurance expert, the following questions can help you select the appropriate coverage.

Coverage for personal possessions

A crucial part of renters insurance is personal property coverage, which guards against theft, fire, and a variety of other terrible occurrences.

1. How much insurance should I buy?

In the event of a burglary, fire, or other covered disaster, be sure you have adequate insurance to replace all of your personal belongings. Making a home inventory, which is a thorough record of all of your items and their estimated values, is the simplest approach to figure out the value of all of your personal property.

2. Should I choose replacement cost or actual cash value coverage?

Policies with actual cash value deduct depreciation (that is, the idea that items lose value over time). If your possessions are damaged or destroyed, replacement cost coverage, which is more expensive, may be well worth the added cost (consider how much you would get for your TV if you sold it for used against how much it would actually cost to replace).

3. What disasters are—and are not—covered?

Your losses from fire or smoke, lightning, vandalism, theft, explosion, windstorm, and specific forms of water damage are all covered by your renters insurance (such as from a burst pipe or when the tenant upstairs leaves the water running in the bathtub and floods your apartment).

Most renters insurance policies do not provide coverage for earthquakes or floods, much like typical homeowners policies. The National Flood Insurance Program and a few commercial insurers offer flood insurance. Depending on where you reside, you can either purchase earthquake insurance as a separate policy or have it added as an endorsement to your tenants policy.

4. What is my deductible, and how does it work?

A deductible is an amount of money you responsible for paying before your insurance coverage. For example, if you have a $500 deductible and a fire destroys $5000 worth of furniture, the first $500 is your responsibility and your insurance company will cover $4500.

Renters insurance deductibles are generally specified as a dollar amount, which can be found on the Declarations page of your policy. In general, the larger the deductible, the lower your insurance premium.

5. What is a “floater” and do I need one?

A floater is a separate policy that provides additional coverage for more costly valuables if they are lost or stolen. If you have expensive jewelry, furs, collectibles, sports equipment or musical instruments, consider adding a floater to your policy to protect against their loss.

6. Am I covered if I am traveling or away from home?

Most renters polices include what is called off-premises coverage, which means belongings that are outside of your home are covered against the same disasters listed in your policy. For example, property stolen from your car or a hotel room while you’re traveling would be protected.

Liability protection

7. What is liability insurance?

Renters insurance offers liability defense, protecting you from claims of personal injury or property damage caused by you, your family, or even your pets. Up to the amount of your policy, this coverage covers the expense of your legal defense.

No-fault medical insurance should be an element of the liability protection in your renters policy. If someone is hurt on your property, medical payments coverage enables them to submit their medical costs to your insurance provider so that they can be paid without filing a lawsuit.

8. Do I have enough liability insurance?

Make sure the amount of liability coverage provided by your policy is sufficient to protect your financial and other material assets in the event of a lawsuit.

9. Do I need an umbrella liability policy?

Consider acquiring a personal umbrella liability policy if you require more liability coverage. When your renters’ or auto policy’s basic liability coverage reaches its maximum, an umbrella policy takes over. Additionally, it will protect you against claims of defamation and libel.

Additional living expenses

Additional living expenses (ALE) coverage provides coverage if your home is destroyed by an insured disaster and you need to live elsewhere for a time.

10. What does ALE cover?

The additional living expenses portion of your rental insurance policy pays for hotel bills, temporary rentals, restaurant meals and other expenses you incur while your rental home is being repaired or rebuilt. Essentially, it covers the expenses you would not have to incur if you had your usual roof over your head.

11. How much does ALE cover?

Most policies will reimburse you the full difference between your additional living expenses and your normal living expenses; however, there are generally limits as to the total amount the insurer will pay or time limits specifying how long you’re eligible for the ALE payments. Make sure you’re comfortable with the limits of the policy you choose.

Multiple policy and other discounts

12. What types of discounts are offered on renters insurance?

Insurance companies often offer discounts on renters insurance if you have another policy with them—for example, car insurance or business insurance.

You may also get a discount if you:

  • Have a security system
  • Use smoke detectors
  • Use deadbolt locks
  • Have good credit
  • Stay with the same insurer
  • Are over 55 years old



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