Around 95% of all homeowners presently have homeowner’s insurance. But, in 2016, just 41% of renters had renter’s insurance, despite the multiple benefits it brings to policyholders.
Unlike the name suggests, renters insurance plans do more than just cover your personal items or protect you from the cost of damaging your apartment. They bring a bundle of benefits that make it well worth the small monthly charge.
This article will discuss what renters insurance actually is and isn’t, who and what is covered by the typical renters insurance policy, and how you can calculate the extent of coverage you are likely to need.
What Is (and Isn’t) Renters Insurance?
Simply put, renters insurance covers you, anyone named on your policy (like your partner and children), your stuff, and additional costs. These could include temporary living expenses or medical and legal fees that might be incurred if you had to vacate your home for a short period or pay for damage caused to someone else or their property.
May people think they don’t need renter’s insurance for a number of reasons. The three most common are listed below:
Renters insurance isn’t coverage for the property you are renting. If the boiler breaks down or the pipes burst, it’s for your landlord and their insurance to cover.
Neither will this type of insurance cover you for power cuts, items of considerable value (unless specifically added to your policy), or Armageddon. The last brings up a good rule of thumb: unless the peril is listed, it is unlikely you will be covered for it.
Who and What Is Covered By Renters Insurance?
Most renters insurance policies cover personal property, temporary living expenses, personal liability, and medical bills.
Personal property is pretty self-explanatory. All the things you have filled your home with are covered by standard policies from ‘named perils.’ These include everything from fire, vandalism, and theft to damage from aircraft, vehicles, and riots.
When it comes to temporary living expenses, do you remember those burst pipes that the landlord is responsible for fixing? Well, the construction work requires the apartment to be vacated for the repairs to take place. Your renters insurance will cover the cost of a hotel and sometimes even the extra needed for laundry and food expenses.
For personal liability and medical bills, renters insurance policies can extend to cover legal fees and medical costs. Imagine the scenario in which your child crashes their bike into your neighbor’s car, scratching the side panel and breaking their side mirror. In the process, they’ve cut their knee and need stitches. Additionally, your neighbor wants to sue for the damage and loss of income as it’s their work car. The personal liability will cover the damage, the medical bill, and also the legal fees.
How to Calculate Your Level of Coverage
Whenever you open a new insurance policy, you need to select the amount of coverage you want. You’ll need to consider how likely you are able to replace your own things if a burglar stole all your electronics and how much help you’d need.
To decide, take a walk around your home and list the items you need to cover with an estimated value. Include any special items such as jewelry, bikes, and cameras too, but remember these will probably be named on the policy as ‘extras’. Add it all up to give you an idea of the level of coverage you need and then round it up to the nearest $10,000.
Consider your lifestyle and your ability to pay upfront for replacing these items versus your ability to pay on a monthly basis. With all of this in mind, select the level of coverage that best suits you.
Renters insurance can usually be stopped and started immediately. Furthermore, monthly charges, starting from roughly the same amount as a cup of coffee, mean you won’t be locked into coverage when you don’t need it. Investing in peace of mind for you, your possessions, and the possibility of damaging someone else’s prized possessions is definitely worth that small fee.
Article by contributor
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