Understanding the coverage provided by a renter’s policy may help you determine whether you want to purchase such a policy.
Generally, you may get coverage under a renter’s insurance policy for the following:
- PERSONAL PROPERTY: This will cover your personal belongings. Speak with your agent about antiques, collectibles, furs, cash on hand, computers and other tech devices as such items may sometimes be limited or excluded by your policy. And be sure you understand what your overall limit is for personal property. Your agent may be able to walk you through some guidelines for determining the proper amount for your personal items. It is also good idea to take an inventory of your personal belongings: write them out along with how much you spent on the item and have a picture and/or receipt for the item, if possible. Speak with your insurance agent about purchasing additional coverage for high-end items as these are usually limited and once you meet that threshold amount, the remainder of your item(s) will not be covered. Often, policyholders will purchase endorsement to increase their coverage limits for items such as jewelry, fine art, and electronics, among others.
- LOSS OF USE OR ALE: This coverage is used to pay your additional living expenses (ALE) if damages due to a covered loss make your current place of living unlivable. An example may be if the place you rent suffers fire damage and you are unable to live in your place while the damage is being repaired (and fire is a covered loss in the policy) you may be able to recoup living expenses such as food and rent to temporarily stay elsewhere. Make sure you understand your limit as this coverage is generally limited to approximately 10 percent of your personal property coverage.
- PERSONAL LIABILITY: This coverage is intended to protect you should someone become injured in your home and it pays legal costs if you are liable and are forced to go to court. Typically, this coverage, as well as an amount of coverage, is required and stipulated in leasing agreements. Examples of this requirement are commonly found in apartment leasing agreements and proof of such coverage is generally required upon move-in.
What is Not Typically covered
Generally speaking, a renter’s policy will cover losses caused by fire, smoke, theft or vandalism and some types of water damage. However, flood coverage is usually not a covered loss in a typical renter’s insurance policy. If you currently rent and are either located on the first floor, or a portion is on a first-floor level, you may want to consider investing in overage in the event you incur flood water damage.
Do you Understand your Renter’s Insurance Policy?
Understanding your insurance policy and knowing what type of coverage you have—and do not have—is critical to protect your personal belongings and your potential exposure to personal liability. If you need guidance understanding your insurance policy or if you are having trouble pursing your claim against your renter’s insurance carrier, contact a knowledgeable insurance professional to assist you.