Facts About Renters Insurance
Some renters forgo buying insurance to cover the loss of their belongings due to theft or some other unforeseen circumstance because they don't think their possessions are worth much. However, renters should consider the out-of-pocket expense of replacing their belongings before they decide they don't need renters insurance. The insurance covers more than just the contents of an apartment or rental home.
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Coverage
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Renters insurance can provide coverage for items and incidents inside and outside of an apartment or rental house. Renters are usually aware that belongings stolen from their homes could be covered by renters insurance, but fewer may be aware that items stolen from their vehicles could be covered as well. A renter whose child floods an apartment bathroom by leaving water running in a bathtub would likely end up paying out of pocket for the damage caused by the incident without renters insurance. That's because landlords' insurance policies usually cover damage to their buildings if the damage isn't caused by a tenant.
Injuries
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People who have renters insurance are usually covered for accidents inside their homes in which visitors are injured. This can be especially important if you throw parties or frequently have guests in your home. Policies usually include some no-fault medical coverage for guests. No-fault coverage means policyholders don't have to wait for a court decision to determine who's liable for an in-home accident before claiming the coverage provided by their renters insurance.
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Types
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An insurer will probably offer one of two ways to cover your belongings with renters insurance. A cash-value policy is usually the cheaper option, but the policy's payout for any of your belongings that need to be replaced will be based on how much the items have depreciated since they were purchased. A replacement-cost policy will cover the replacement of your belongings at current costs despite their value. Estimated costs for renters insurance policies range from $10 to $20 per month.
Limits
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You may need extra coverage if you own expensive jewelry, high-end electronics or other pricey items. Basic renters insurance policies include reimbursement limits. For instance, you may own a necklace that's worth several thousand dollars, but a basic policy can limit your reimbursement amount for it if it's stolen no matter how much it's worth. The cost of extra coverage may significantly increase the monthly premium you pay for renters insurance. Understand how much more your insurer will charge for additional coverage before you agree to purchase it.
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