It is common knowledge that homeowners carry insurance on their condos and houses. It is even required by many mortgage companies these days to ensure that mortgaged property is protected while it is still being paid off. Such insurance is important because it not only protects the actual buildings, and pays the medical bills of anyone injured on the property, but it also protects the homeowners’ possessions that are inside the dwelling.

So, what does this have to do with those that rent their living spaces? Well, if you rent, you still have personal property that needs to be secured.

What Exactly Is Renter’s Insurance?

Renter’s insurance is a specific property insurance that covers losses of personal property owned by lessors. It also protects lessors from personal liability lawsuits that are filed due to others becoming ill or injured due to the former’s personal property. In other words, it protects a renter’s items if they are damaged or lost due to theft, fire, electrical or plumbing malfunctions, riots, natural disasters, or vandalism, and it protects their assets in the event of a lawsuit.

Basically, anything that is out of the renter’s control will be on the list of situations that are covered by the renter’s insurance.

If you plan to get a renter’s insurance policy, it is probably best to make an inventory of all of your possessions and put it into a spreadsheet for easy reading. You can then use this information to purchase the best renter’s policy for you based on your personal needs.

Renter’s insurance will reimburse you for any losses or damages in one of two ways. These are referred to as “replacement costs” or “actual cash value” reimbursements. Replacement costs
reimbursements pay the entire cost of a replacement of the item in question with a brand new one that is exactly the same. Actual cash value reimbursements simply pay you what the item was worth prior to it becoming damaged or stolen.

Why Should You Get Renter’s Insurance?

Whether you just moved in, or you have lived in your rented condo or apartment for years, getting a renter’s insurance policy is a financial move that you won’t regret. Not only is it a smart investment, but it will also probably be the most affordable and easiest-to-maintain insurance policy you will ever own.

And, while you may think that you don’t really own anything of significant monetary value, it is more than likely that you do. As a matter of fact, pretty much everyone owns much more than they can easily replace in the case of a total loss, such as after a theft or fire. You would also probably be surprised to find out that the average lessor owns approximately $20,000 in belongings, according to some recent estimates.

Also, you have to remember that as careful as you are with your belongings within your rental, you have absolutely no control over what your neighbors are doing. Other people can let in some very ill-intentioned folks, or simply leave the main gate wide open. Or, they can fall asleep with dinner in the oven or a lit cigarette in their hands. So, it doesn’t matter how vigilant you are when you share walls and common areas with others.

What Does Renter’s Insurance Cover?

Renter’s insurance covers three separate situations that will certainly come in handy in the event of an emergency. Let’s address each of these in detail:

Personal Possessions

As we have already discussed, this coverage extends to all of the contents that exist inside the dwelling that you are renting. A blanket policy will cover all the perils named above as well as
any additional perils that are specifically named in your paperwork.

These policies even cover the obscure, such as damages caused by aircraft or vehicles, volcanoes, and acts of war. Flood and earthquake damage is not typically covered under such policies, however, and will require separate policies if you reside in a zone that is prone to such disasters.

Liability

This coverage extends to your belongings as far as the bodily harm that they cause to another person who has visited your home. Also, if you are being named in a lawsuit for any damages that you, your family, your pets, or your possessions have caused, this coverage should pay off any settlements, judgments, legal expenses, and court costs within the policy limits.

Living Expenses, If Necessary

This coverage will pay for your temporary housing, if, and when your rented dwelling unit becomes inhabitable due to any of the listed perils that are covered in your renter’s policy. This includes hotel bills, restaurant food, and any other associated expenses while your rental is being rehabilitated.

What Doesn’t Renter’s Insurance Cover?

Sometimes it can be difficult to discern what renter’s insurance will cover or not. Any structural
problems with your dwelling are the responsibility of your landlord, and his or her property insurance will cover the damages.

So, while it is his or her responsibility to cover the actual building, your renter’s insurance will cover the contents inside, which is not his or her responsibility. He or she is also free from liability if someone were to become injured specifically due to your family, pets, or property.

There are also other, less likely occurrences that are not covered by the majority of renter’s policies, such as backups of sewage and water damage. Many times, you pay an additional premium to include coverage for these incidents if you feel like you may be at significant risk.

You can also purchase additional policies if you own particularly expensive or high-end items, such as specific electronics, fine jewelry, works of art, furs, or antiques. You can get what is referred to as ‘floater insurance,’ which appears as a rider on your original policy, to cover these valuable items.

When asking yourself, “How much should condo insurance cost me and my family?”, keep in mind that the renter’s insurance may not cover any losses that are caused by intentional actions or your own personal negligence. It’s important to keep that in mind when opting for additional coverage to properly protect your family and their living style.

You can’t really put a price tag on your peace of mind. Renter’s insurance keeps minor issues and incidents from destroying lessors financially. Just remember, no matter how thorough your landlord’s building and property insurance may be, it will never cover your personal belongings. Getting your own renter’s insurance policy is the only way to cover yourself and your loved ones properly.


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