Renters’ Insurance Explained
Moving into your own place for the first time is a life changing event or it is simply a move into a new city or perhaps a step up. Keep in mind however, that it is also important to think of how you might fare financially should an accident or some other loss-causing event occur that results in financial harm. By buying good renters insurance, you can help keep your rental home safeguarded while also saving over the long term should the unexpected ever occur.
What is it?
Renters insurance is different from homeowners’ or auto insurance in that this kind of coverage only protects personal belongings within the walls of your rental home. The landlord usually carries a policy that covers the actual home or apartment structure, but if an accident, fire, or a person destroys any of your personal belongings, then only renters insurance will pay you for lost or damaged items.
It is wise to ponder the total dollar amount it would take to replace all of your personal belongings at this moment. It would likely surprise you how much value there is and, certainly, most renters couldn’t come up with such an amount without a huge financial hit. Also, and quite importantly, a renter’s insurance policy protects you if someone injures his or herself while inside your apartment and then sues you. Keep in mind that this coverage is so important there’s a likelihood that the landlord may mandate that you carry it.
What it covers
Normally a renter’s policy will cover losses that are the result of such things as fire, theft, vandalism, leaking plumbing, and severe weather events. However, this policy like others, will normally exclude such natural disasters as floods, hurricanes, or earthquakes. Covered for these things can be obtained by separate policies and, depending on where you live, could be important to look into.
Types of coverage
Renters coverage is pretty standard, though there are differences depending on the kind of home in which you live. The main difference in policies is the payout choices: One type is “actual cash value” that gives you the value for your things less any depreciation. “Replacement value” policies will usually be more expensive, but you will enjoy substantially more reimbursement for any damages or losses.
The big plus in owning a good renter’s policy is the knowing that your belongings are financially protected in the event of some peril or loss-causing action. An additional plus is that renter’s coverage is relatively cheap, yet very effective when one needs it.