Types of Renter's Policies
Renters insurance covers non-owners in case of accidents or damages. The two main types of renters insurance are for homes and apartments (including condos, townhomes and mobile homes) and cars. Homeowners and condo associations cover only the building; car renters insurance typically covers only damages to the automobile. Renters insurance is designed to cover what standard policies do not.
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HO-4 Standard Coverage
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HO-4 renters insurance is the most common type of insurance required for those who rent homes or apartments. It usually covers two categories of renter loss: property and loss of use of clothing and furniture. Money, securities, jewelry, firearms and silverware may be covered also, but these items will have special limitations clauses attached to them. Losses from the following are included on a standard policy: Fire, lightning damage, windstorms, hail, explosions, riots, damage from aircraft or vehicles, smoke damage, vandalism or theft, falling objects, floods caused by leaking water mains or plumbing, volcanoes and sinkholes. Floods from natural disasters, such as lakes, rivers, tornadoes, hurricanes and other "acts of God" (not man-made or under the control of man) are usually not covered, but some insurance companies offer this coverage in separate policies or attach a rider (a separate stipulation for coverage) to your main policy for an additional fee.
HO-6 Standard Coverage
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Master policies for condominiums cover liability and property damage for the building and its common areas, such as hallways, walkways, roof, elevator, boilers and basements, but not the interior of the owner's or renter's living spaces. Generally, anything and everything "inside the studs" of your condo unit is covered under an HO6 policy. These policies cover furniture, computer equipment, clothing, interior walls, ceilings and floors, personal liability and improvements and upgrades. Some also provide coverage for unforeseen special assessments involving major capital expenditures, such as roofing or lawsuits against the condo association. Typically, a renter will need a standard HO-4 policy, but be certain to ask about the condo owner's master policy and find out if they have HO-6 coverage, as well.
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Car Rental Insurance
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You can buy coverage from a car rental company or opt out and use your own; but whichever you choose, make sure you have enough coverage for property damage or full replacement value of the vehicle. The same is true of car rental insurance as with all types of insurance: the higher the deductible, the more (and better) coverage is available. If you purchase the rental agency's insurance, it will pay before your regular auto insurance does. These extra-insurance policies typically cover loss and collision but do not cover claims for medical or accidental death; however, some agencies may offer that type of policy to you, as well.
Exclusions
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Rental car coverage typically does not apply if you were driving under the influence or speeding when the accident occurred. Under home or apartment renters insurance, things like "acts of war," eminent domain, nuclear hazards, intentional destruction, faulty construction or loss caused by substandard materials and labor, which would usually apply to the homeowner's policy, are not covered for the renter or the owner of the property.
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References
- Photo Credit apartment lease sign image by Aaron Kohr from Fotolia.com
