I’ve written several renters insurance policies in the past few weeks for new college grads, people relocating to north Texas, and someone going through a divorce. Some purchased them because the lease requires it while others simply want their personal property covered against what may happen. I felt it to be a good time to revisit renters insurance and the coverage contained in a typical policy.
Personal Property or contents is the coverage for everything you move into an apartment or home you’re renting. This includes furniture, electronics, clothing, dishes, cookware, linens, appliances, computers, phones, artwork and jewelry. How much coverage you need depends entirely on what you own. I recommend prospective clients review what they own and create an estimate of the cost to replace each item, even the loveseat your parents gave you!
Personal Liability protects you when someone comes into your home, invited or not, they get hurt and then sue you for negligence. This may entail someone falling in your apartment, tripping over something, or even being bitten by a pet. Depending on the company, renters insurance typically comes with $50,000 in coverage, although I recommend either $300,000 or $500,000 depending on your income level and what you do professionally.
Medical Coverage is designed to take someone who doesn’t live in the home, to receive medical attention when hurt. It may not keep them from suing but it can be very nice for someone who’s not badly injured. Typical coverage limits range from $1,000 to $5,000, with a nominal difference in cost between these levels.
Loss of use helps financially if you need to move out of your home and rent another due to a claim. This can be used to pay for a few days in a hotel while your apartment is being dried out form a massive water leak, to up to a year if it’s damaged by a fire. Not everybody can cashflow paying for two places to live.
Options are available on renters insurance policies for those who want or need them. If you own nice artwork, jewelry, a great baseball card collection, or incredible electronics, you can protect them better with scheduled coverage. Concerned about water or sewage back up or broken windows? There’s optional coverage for that too, as well as coverage for earthquake damage, floods, and more.
Deductibles are the amount you pay out of pocket before the policy pays for the claim. This is usually stated in a dollar amount such as $250, $500, $1,000 etc. A high deductible results in a lower renters insurance premium, while a lower deductible increases what you pay for the policy.
Discounts are available if you live in a gated community, have security guards on the premises, have a local or monitored burglar and/or fire alarm, smoke detectors, sprinkler system, fire extinguisher, or have your car insurance written by the same company. Find out what’s available!
Have a question about renters insurance? Please ask them, and share your experiences with me on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you!