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What Does Renters Insurance Cover?

Get Three Essential Types of Financial Protection from Renters Insurance

While you may not own the property you live in, it is certainly much more than a roof over your head. Many lifelong memories will be made there, everyday events will play out there, and almost everything of value to you will probably be kept there. So, it’s vital to ensure that you have the right coverage to protect all of the people and things that will come in and out of your apartment.

Of course, your landlord or the property owners are required to have insurance, so you might wonder why that’s not enough protection for you as a tenant. However, a landlord policy is only designed to cover damages to the physical structure of their building, not to any of your personal property inside your unit.

What you need is a personal renters insurance policy. This coverage provides you with the following three essential types of financial protection:

The Three Coverage Areas of a Standard Renters Insurance Policy
Personal Belongings Loss of Use Personal Liability

Coverage Area #1: Your Personal Belongings

Understanding Personal Property Protection

Think about all the old, new, and borrowed things you will be moving into your apartment. From furniture, to electronics, to clothes and cookware, many of these belongings have significant financial value, while other items might have great sentimental meaning. But no matter how high-priced or well-worn your things are, there’s no question that if some or all of these items were to be lost in a catastrophe, like a fire, that you might be hard-pressed to replace them with only the funds in your bank account. But with the Personal Property Protection that a renters policy provides, you could be covered for damages to your possessions resulting from a long list of potentially disastrous events, such as:

  • Fire or lightning strike
  • Hail or windstorm
  • Explosion
  • Smoke damage
  • Falling objects
  • Weight of ice, snow or sleet
  • Bulging, burning, cracking or rupture of a steam or hot water heating system, an air conditioning system, an automatic fire protection system or an appliance for heating water
  • Vandalism or malicious mischief
  • Water or steam that escapes from a plumbing, heating or A/C system, an automatic fire protection system, or from a household appliance due to accidental discharge or overflow
  • Freezing of a plumbing, heating or A/C system or a household appliance
  • Theft or Attempted Theft
  • Breakage of Glass

Personal Property Protection will even cover the things that you take with you when you’re traveling if they are stolen anywhere in the world.

Personal Property Protection Limits & Exclusions

One of the most important details to understand about your personal property coverage is that insurance carriers generally limit the coverage on many of the items that you might consider the hardest to replace if stolen, like money, precious jewelry, or anything pewter, silver, or gold like the watch your grandfather gave you. In order to make up the difference between what your renters insurance provides and the true value of these items if damaged or destroyed, you might want to talk to your local insurance professional about adding a Scheduled Personal Property Endorsement to your policy.

Coverage Area #2: Loss of Use of Your Apartment

Understanding Loss Of Use

What would your living options be if your apartment suffered serious damage to the point that you could no longer live there? Perhaps you could take over the guest room at a family member’s home. You could crash on the couch at a friend’s place – hopefully it’s a sleeper sofa. Or, you could book a hotel room during the refurbishment process and spend a whole lot of your hard-earned cash. If none of these temporary housing ideas sound very practical, then you are really going to appreciate Loss Of Use coverage.

As long as the damage to your place was caused by a covered peril (see the most common ones listed above in Personal Property Protection), this portion of your renters insurance should provide you with reimbursement for additional living expenses, above and beyond your normal monthly expenses, that you incur due to being displaced from your household. Everything from hotel bills and restaurant meals, to storage and moving costs, to extra commuting fees and even pet boarding, should be items that are provided for in this coverage area.

Loss Of Use coverage also reimburses rental income you might have been earning from subletting out a room of your rented home if your tenant is displaced by a covered peril. In addition, coverage applies if a covered peril affects a neighbor’s home leaving you with no access to your home either due to an investigation or because it is unsafe to stay there.

Loss Of Use Limits & Exclusions

There are several important limits to be aware of, including that you will only be reimbursed for additional living expenses that are over and above your normal level of spending. In other words, having this type of coverage in your renters policy does not give you license to book the penthouse suite at the Ritz or to eat at The Cap Grille every night. Rather, you will want to find a place to stay that is comparable in size and quality to your current home.

If you work with a local insurance professional, like Gilbert, who is very familiar with the Greater Boston area, then they will be able to confirm with your insurer whether your temporary place will be approved. Loss Of Use also almost always comes with a time limit established by your specific insurer. Typically, additional living expense payments will be made for the shortest time that they estimate it will take to repair or replace the damages to your apartment. If for any reason, you need to relocate permanently, then payments will continue for the shortest time that your carrier estimates it should take to resettle somewhere else.

Coverage Area #3: Your Personal Liability

Understanding Liability Coverages

It’s easy to gloss over this renters insurance coverage when you don’t feel that you are at much risk for a lawsuit. After all, you don’t own property right now, maybe you haven’t accumulated many assets to date, and perhaps you are just in the early years of your career. However, in the 21st century, it really doesn’t matter if you are someone of extraordinary means or you’re on a tight budget, the potential for a lawsuit to happen to you has dramatically increased over the past several years. Whether it’s a claim against you for an injury that occurs in your home or for damages caused by you, a family member or a pet, you could be on the hook for thousands of dollars in legal defense costs, medical payments to others, property damage payments, and more. And, if you are sued and don’t have the right insurance protection to help you weather this storm, it could be devastating to you and your financial future.

However, if you have renters insurance, the built-in Personal Liability coverage helps protect you against claims of bodily injury or damage to other people and their property while in your apartment, or that is caused by your personal activities, including most sports, or by your children or pets. You should have at least $100,000 in Personal Liability coverage, but you can always opt for more for just a few extra dollars. It’s best to review your needs with an insurance agent who can offer expert advice on the appropriate limit for your specific situation and lifestyle. If you and your agent determine that you need more than is available through your renters insurance, you can consider investing in umbrella insurance, which can protect you even further.

Medical Payments To Others is another often overlooked and undervalued liability coverage area in your renters insurance policy. If someone sustains an injury in your home or as a result of actions by you, a family member or a pet, this coverage will pay accident-related medical expenses that are incurred within three years from the date of the accident. What medical expenses refers to is actually quite broad, including reasonable charges for medical, surgical, x-ray, dental, ambulance, hospital, professional nursing, prosthetic device, and funeral services. Whether you were negligent or not, the injured party can simply submit their medical bills directly to your insurance company. Having Medical Payments coverage can help you avoid the terrible expense of legal proceedings and the extreme stress of a liability claims process.

Liability Coverages Limits & Exclusions

Your renters insurance liability coverage will not apply if the injury or damage you cause involves your car, truck, or large boat. You obviously need to have separate insurance policies to ensure that you have protection for accidents involving these types of vehicles. However, in some cases your liability coverage will protect you for accidents that occur as a result of your golf cart or small sailing vessel or motorboat. Check with your insurance partner to find out the specific details of your policy.

While these are the three essential coverages that you should have in your renters insurance policy, there are many other additional options that insurers offer. Removal of debris, fire department service charges, credit card forgery, and more might be smart to include in your renters insurance policy and could save you money in the long run.

As you can see, there is a lot to think about when it comes to getting the renters insurance that accurately fits your unique needs. Price shopping online for a policy may not be the best way to ensure you get the comprehensive coverage you need at the competitive rates you desire.

When you work with a local, knowledgeable insurance agent like Gilbert, you will get help finding the renters insurance policy that properly safeguards you and your things, meets the requirements of your landlord or property management company, and that probably saves you money. That’s because we have access to multiple insurance carriers who offer a variety of renters insurance discounts, including a very popular bundle-and-save option. This discount could lower your insurance premium by 15% or more when you combine your renters and auto insurance policies with the same carrier.

To learn more about what renters insurance covers or for a free renters insurance quote, please call us at (781) 942-2225. You can count on us to respond quickly with affordable and quality renters insurance options for your new home.

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