It rained in your house and now your brand new couch is more like an overly used sponge. That tree your husband has been meaning to cut down just hit the house and now you have your own sunroof. The kids plugged up all their game systems, in addition to having all the lights on and the microwave was running thus causing a surge to the house and now the 56" TV is fried. Initially, you are irate, fed up, pissed off and the list probably goes on until you realize you were prepared for this very moment, you know how- Renters Insurance.
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WHAT IS RENTERS INSURANCE?
Renters insurance does not cover the space in which you live when you are renting, it covers you. Renters insurance will cover your personal belongings and offers liability coverage for injuries or damage you are legally found liable for. Sometimes renters insurance is broken down into categories such as contents insurance and liability coverage. Contents insurance pays for your possessions if they are damaged or stolen. Liability coverage will help protect you if your apartment floods or catches fire and it affects a neighbor or if someone is hurt it can help cover those costs.
WHY DO I NEED RENTERS INSURANCE?
If something happens to your home as a result of a natural disaster, it is more than likely your responsibility to replace any of your damaged belongings. Renters insurance will help protect your items in the event of water damage, windstorms, lightning, theft, burglary, and/or vandalism. Although these occurrences may hot happen frequently it always better to be prepared. If you consider all the importance of your belongings and start adding up costs you may be able to see just how much having renters insurance would protect you in the long run. Most people have furniture, clothing, baby items, electronics, and other items in their homes worth value. Now imagine trying to replace all, or the majority of all those things at one time due to an unexpected event. The key is to always be prepared so that when things happen you don't have to get prepared.
AN IN-DEPTH BREAKDOWN OF WHAT RENTERS INSURANCE COVER
Now each policy is different so be sure to do your research as to what you need and what is offered. All coverages are different based on your particular policy. Nevertheless, we can go over the items and circumstances that are commonly covered by most renter insurance companies.
I. Theft - You just bought that awesome 72" TV from Best Buy and boy, oh boy does it have a great picture. You get home, get it all set up, and realize you're missing the HDMI cord you need to hook up your gaming console. So, you leave to run back to the store to get the cord, but when you get home someone has broken into your house and stolen your new TV- tragic. What can you do? Well, if you have personal property coverage through your renter's insurance you can file a claim which will either provide you with some or all of the money needed to replace that television. In some cases, renters insurance can also protect you when you're not at home. Let's say you were taking TV over to your friends for an epic movie night but someone robs you at a gas station, it is possible that your renters insurance would cover part or all of this claim as well.
II. Not at Fault Damage - Your brand new TV is plugged into a surge protector and you are playing your favorite game on Xbox (of course) and suddenly the plug sparks and a fire catches- what is there to do? You have to leave the house because of the smoke inhalation and repairs, so what options do you have? The great thing is your renters insurance can help you replace your personal belongings that were damaged. The extra added plus is that if you have "loss of use" coverage with your policy it will help pay for your temporary living arrangements until the house is habitable again. The same instance would apply if there was a major pipe burst, flood, leak or etc.
III. At Fault Damage - The benefits of liability coverage can be applied here. You're over at your best friend's house playing Super Mario Cart on the Wii. You're winning and get overly excited and accidentally throw the remote into the TV. Thus, not only creating a crater in your friend's TV but leaving it inoperable. What are you to do? Once again here is where your renters insurance can save you. Liability coverage can also cover damages caused by you or members of your family including pets. So think of it just like full coverage car insurance. If you get into an accident at fault or at no fault of your own your insurance can help in finding a remedy to that problem. Renters insurance can protect you not only at home, or in travel, but also in the event you cause damage at another residence. How great is that?
IV. Injury - You know your grandmother is coming over so you make sure to clean the house and have it ready so grandma does not have any reason to fuss. So, before grandma comes over you mop the house really well, but when she arrives the floor has not fully dried. Grandma walks in the door but before she gets to her favorite chair at your house she slips and falls. Now grandma has to go to the doctor and medical bills have incurred- what are you going to do? Although, not a frequent occurrence, it is possible and you could be left with extensive medical bills. There are policies that will cover these types of incidents as well through your renters insurance.
WHAT DOES RENTERS INSURANCE NOT COVER?
I. Auto Theft - Your renters insurance will generally cover the theft of personal belongings if stolen from your car, but will not cover the actual car if stolen.
II. Expensive Items (Exceeding a certain amount) - It is possible to insure valuable items using your renters insurance policy, but more than likely your insurance will have a coverage limit for these types of items. In some cases, you can purchase a supplementary policy to cover these items. They may have specific policies for expensive jewelry or electronics. You do not want to be in a situation where something is damaged, but unable to be covered under the policy. Be sure to compare policies and call if you have more specific questions.
III. Flood & Earthquakes - Most renter insurance policies cover natural disasters. However, floods and earthquakes typically are not included in this coverage. If you happen to live in an area where this is common, make sure you check that the policy you have or plan on having covers these instances.
IV. Non Resident Items - The only items covered by your renters insurance are belongings owned by those who live in your house. More than likely your renters insurance will cover your spouse and children. Some policies will allow you to cover your young adults if they are away at college. However, if you have a roommate they would want to have their own personal property and liability coverage through their own renters insurance policy.
V. Landlord Responsibilities - If you live in an apartment building your landlord should have their own insurance that covers damage to the units. For example, if your apartment catches fire your renters' insurance will help replace your personal property, while your landlord's insurance should pay for the restoration to make the apartment habitable.
KNOW YOUR INSURANCE POLICY
Of course, all renters insurance policies are different and you will need to refer to your own individual policy to see what is and what is not covered. You need to make sure you know your coverage limits and deductibles and what type of coverage you have. Remember there are two types of coverage for personal property: the replacement cost and the actual cash value. Replacement cost means your renters insurance company will pay you the cost to replace the damaged or stolen item with something comparable. Actual cash value coverage means that your insurance company will take into account the depreciation and you will receive an amount that they believe the item is actually worth. Make sure you verify your type of coverage.
PRICE OF RENTERS INSURANCE
The average premium for renters insurance is about $15-$25 a month, but this varies based on location and the coverage needed. There are factors that will help determine the type of coverage you need and the price. If you are in area that is more frequent to floods and natural disasters then it could be higher. If you are in an area that is considered high risk for crimes and theft then it is also possible there would be an increase in your renters insurance. The price of your coverage will also depend on the value of the items you want to insure if you want personal property coverage and/or liability and the amount you choose for your deductible.
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IN CLOSING
Renters insurance is a layer of protection that can help you in the event of a loss. Initially, this can seem to be an unnecessary bill, but if one day your house is flooded and all your clothes are ruined- it may become a necessary bill to help get your life back on track. Did you know that a lot of car insurance companies will let you bundle renters insurance with your policy? It is also possible that by bundling these policies you can receive a discount. Remember that even if you think you can replace all your belongings in the event something was to happen, renters insurance could help keep you from ending up in a financial crisis. Also, if you are found liable for extensive damage, you could end up needing to file bankruptcy - renters insurance could help prevent this. You should seriously consider your financial ability to cover unexpected costs that can arise from incidents that would normally be considered under renters insurance. In addition to having to cover an incident if a situation was to arise consider the normal bills and day to day cost of living you would still be required to maintain or handle. You want to make sure that you are not in financial straits. Even if you feel that these situations are unlikely to occur, you may want to reconsider. There is not one person who likes to spend money on a service they may never use, but no one wants to go broke trying to fix a situation they could have had taken care of in the beginning either. Every day we are alive anything could happen. No matter what we predict for the day, all days are unpredictable and we need to be prepared.
Maintain your peace of mind and get renters insurance.