Too many of those who are renters erroneously think that they don’t need renter’s insurance. It is important for the renter to know that the landlord’s insurance only covers the building structure. Renter’s insurance is what is required if you feel the need to have your personal items protected from potential loss.
In many states it is sanctioned to allow property owners to mandate a minimum amount of renter’s coverage for their tenants. While not all landlords require this, it is still a good move for a renter to seriously consider the options of renters’ insurance. Not only does it protect a renter’s personal items, but it also covers the liabilities one can be exposed to in having guests in the home.
Your level of protection is dependent upon the kind of policy and amount of coverage the renter elects to purchase. Most normal policies will cover personal belongings up to a determined and agreed upon amount for such events as natural disasters and fires, burglaries, faulty HV/AC units, plumbing and for theft and vandalism. Depending on where the renter lives, certain natural disasters, like earthquakes, may not be covered. Separate add-ons can be purchased for more comprehensive protection.
In addition to a normal level of coverage for your rental home, one should make sure that the policy includes some liability coverage in order to protect him or her and any guests with medical and legal coverage should a mishap, like an injury, occur. This protects the renter from personal liability, which can result in huge out-of-pocket costs without coverage.
For many, the most important feature of coverage is that of living expenses. If your rental unit becomes uninhabitable, whether due to a structural problem or, say, from a utility service outage that extends for days or weeks, a monetary allowance can be provided to help with temporary relocation.
How you are compensated for replacement of the damaged property is determined by whether you elect to have Actual Cash Value (ACV) coverage or Replacement Cost Coverage (RCC). ACV coverage will compensate you for the actual appraised value of your property at the time. RCC coverage will pay out for what it actually costs to replace the item. Items like expensive art pieces, antiques or jewelry are great candidates for an additional rider to be purchased for more coverage.
Should you file for a claim of loss against your policy, you may be required to make a payment of a deductible. This is a way to ensure that premiums are more reasonable and that frivolous claims are not made. The higher the deductible paid, the lower the premiums tend to be. Perhaps the biggest reason for obtaining coverage is the incredible peace of mind provided for the renter who keeps his policy paid up and active at all times.