Resolution for a smarter 2018: renter’s insurance
A new year, same old policies for homeowners and renters alike. The landlord’s property insurance policy covers the losses to the structural elements of the buildings, regardless if it’s an apartment, a house or a duplex. The personal property and certain liabilities are covered through a renter’s insurance policy, something the tenant needs to search and pay for.
Yet, the number of renters who have invested in a policy is very low, while about 95 percent of the owners hold their specific policy? Why the huge gap? One reason is that, even after all these years, many people assume that their landlord’s policy will cover their belongings too. Another is that people tend to underestimate the value of their possessions. Simply putting your clothing next to your electronics and you will notice their combined value goes into the thousands of dollars. Another explanation is liability—if someone is injured in your house (a friend, neighbor or even the delivery guy) they could sue you. Let’s go over the best reasons you should get a renter’s insurance policy:
- It is affordable—getting renters insurance coverage costs as little as 43 cents/day. Of course, the actual cost will depend on different factors, including how much coverage you need, the type of coverage you desire, the amount of your deductible and your location.
- Personal property coverage—the renter’s insurance policy protects against losses to your personal property—clothes, jewelry, luggage, computers, furniture and electronics. Even if it feels that you don’t own much, studies show that the average renter owns about $20,000 worth of personal property. Among those many perils covered by the renter’s insurance are:
- Damage caused by vehicles
- Damage caused by aircraft
- Fire or lightning
- Vandalism or malicious mischief
- Riot or civil commotion
- Volcanic eruption
- Weight of ice, snow or sleet
- Falling objects
- Windstorm or hail
- Damage from water or steam from sources including household appliances, plumbing, heating, air conditioning or fire-protective sprinkler systems.
- Liability coverage—this is also included in the standard policies. This is what protects you if someone is injured on your premise or if you or another covered person accidentally injure someone. It also pays any court judgements and legal expenses, up to the policy limit.
- It covers your possessions when you travel—the policy protects your belongings regardless of where they are—in your home, car or with you while you travel. Check your policy or ask your insurance agent for details on what constitutes “other covered losses.”
- Your landlord might require it—your landlord’s insurance covers the structure itself and the grounds, but not your possessions. Ever more landlords are requiring tenants to purchase their own renter’s insurance policies and ask for proof. The request can be your landlord’s idea, or their insurance company’s—in other words, if the tenants are covered themselves, some of the responsibility can be shifted away from the landlord.
- Additional living expenses—in the unfortunate event your home becomes inhabitable due to one of the covered perils, your renter’s insurance policy may cover “additional living expenses”, such as the cost associated with living somewhere else temporarily, food and more. Check your policy to see how long it will cover additional living expenses, and if it caps the amount you may claim.
Happy New Year!