If you are liable to someone visiting your place or for property damage elsewhere, renter insurance is your line of defense to protect your assets. See what a renter policy can do for you to keep your financial road smooth in case you go through the unexpected.
As a renter, most of your assets (other than your vehicles) are things you own, such as furniture, clothing, appliances, TVs, computers, artwork (with limits), tools, etc. With renter insurance, these possessions are covered while they are inside or outside the rental unit, so for example, a relatively high-value item like a laptop computer will be covered from theft.
Perils Not Covered:
Unusual personal property items that are not covered:
Personal liability coverage reimburses you for legal expenses and settlements if you are charged in a liability lawsuit.
If someone slips and falls in your apartment and needs to go to the ER, the cost will be reimbursed by the renter policy’s Medical Expenses coverage. If someone slips and falls on ice outside your rental property and decides to sue you, the personal liability coverage will be triggered.
The renter policy can also protect you from property damage you are liable for. For example, if a broken pipe in your apartment damages a neighbor’s property, your insurance policy should cover damages.
If you “lose” the use of your rental as a result of the covered perils listed on your policy, you will be reimbursed for any “additional living expenses,” you had in order to maintain your normal standard of living while waiting to get back into your apartment or searching for a new one.
If “your normal standard of living” involves cooking at home but now you don’t have access to a kitchen, you can be reimbursed for the expense of eating out more often. If you regularly swam in your apartment’s pool, the insurance company should allow you to find a reasonable place that gives you access to a swimming pool. You can also be reimbursed for extra gas in case your mileage is higher than normal.
Personal property inventories
Taking an inventory of your personal property is very helpful to get the right amount of coverage. You can make an inventory by making a list, taking photos, and saving receipts (or at least having estimated values). You will also seriously thank yourself that you made one if you end up needing it. Dealing with a major loss to your property is a really tough time to list all your items and their approximate cost. An inventory with photos will make it much easier for you and your insurance company to agree on what was lost in a claim situation.
Personal property with replacement cost
A Replacement Cost valuation of your personal property pays you the amount it would cost to buy your used property new.
Personal property with actual cash value
If your personal property is valued with Actual Cash Value, then you are insured for the depreciated value of all of your property. For example, if you have a five-year-old television that originally cost $1,000 then the insurance company might pay you $500. You will have a hard time replacing all of your property with an Actual Cash Value policy. If your policy is Actual Cash Value, you may be able to add a Replacement Cost endorsement for certain property.
Deciding a liability coverage limit
Ultimately, this is the amount you could lose if someone “sues you for all you’ve got.” This is typically your net worth, plus an estimated loss in earnings, such as your annual salary times five.
Loss of use coverage limit
This is usually a percentage of your personal property limit, so there is not much deciding to do here. A typical loss of use coverage limit might be 40% of your personal property coverage.
Scheduled property endorsement
These endorsements add coverage to excluded property or increase the sub limits to property that has a specific maximum amount.
At-home business endorsement
If you make more than $2,000 a year at home, then your renter policy won’t cover the business equipment. An at-home business endorsement would increase the coverage to include this equipment.
Replacement cost endorsement
Most renter policies automatically use Actual Cash Value to value personal property. If you have a certain piece of property, like a home entertainment system or a set of special tools that you want. Replacement Cost to cover, then consider adding a Replacement Cost endorsement for those specific items.
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