Renters Insurance 101

What is renters insurance?

Renters insurance is designed to cover a person's personal property should it be stolen, vandalized or damaged due to a covered loss from a property that he/she is renting. Most companies extend coverage for your personal property stored in other locations as well. An example would be property stored in a storage unit while your are in the process of moving. Although most people believe that this is the only coverage provided within a renters policy, this policy actually contains coverage for many other risks that may affect a renter.

How am I covered?

I have detailed coverage below to illustrate the most common type of coverage within a typical renters policy.

I will start by defining actual cash value and replacement cost as these are very important renters insurance policy attributes. You will have to determine which of these coverage definitions your policy falls into. It is important to understand that you can usually change between the three by calling your agent and updating your policy. All changes must be completed prior to a claim on your policy as this change will affect the payout of your claim significantly. The most common coverage type is extended replacement Cost.

• Actual Cash Value – Is the value of your personal property minus a deduction for age, wear and tear and other factors


• Replacement Cost – This coverage type would pay the amount necessary to replace the item with an exact or like kind. No depreciation is subtracted from the value.

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I have detailed the common homeowners insurance policy coverage below:

• Personal Property – This limit is the maximum the company would pay to replace any of your personal items such as TV, clothing, jewelry and cash in the event of a covered loss.

NOTE: It is important to understand that by default your renters policy will not cover cash for more than $100 to $200. Collectible, Fine China, Jewelry and such items will also have a cap in coverage. Such items must be added on to your policy as a floater or endorsement which may require an appraisal to be insured at full value. This may also add additional costs to your policy.

NOTE: It is important to know whether your personal items are covered under actual cash value or replacement costs. Actual Cash Value will pay at the depreciated value and replacement cost will pay the amount necessary to replace the item with an exact or like kind.

• Loss of Use - This is the limit the insurance company would reimburse you for additional living expenses to maintain your normal standard of living. This would be granted should your property be rendered uninhabitable due to a covered loss.


• Personal Liability - This is the limit the insurance company when you are legally obligated to pay for bodily injury or property damages to others resulting from events such as Acts of your pets, Use of your premises (Such as swimming pools), Unintentional acts committed by your or a qualified household members (either on or off your premises). Your personal liability coverage also includes coverage for expenses such as attorney fees, court costs, investigator fees and witness charges when defending you in court. In most cases they will pay you for your time off of work when you are asked to appear in court. All policies handle this differently so it is important to consult with your agent to have a clear definition of how your policy covers personal liability.

NOTE: All renters insurance policies handle this differently so it is important to consult with your agent to have a clear definition of how your policy covers personal liability.

• Medical Coverage – This is the limit the insurance company would pay for any monies incurred by any non-household member for bodily injury on your premises. This is basically a medical aid to others should they have a bodily injury at your residence such as a slip and fall, etc.
  
  
• Deductible - Your deductible amount is the amount of money you are responsible for as the insured before the insurance company begins payment.

What additional coverage can I add?
These are just a few additional options that may or may not be available with your policy. It is always important to consult with your agent to find out all of your options so that you may make the most educated decision on which fit your needs best.

• Add Replacement Cost on Personal Property Coverage
• Add Identity Theft Coverage
• Add Jewelry, Collectibles, Fine China Endorsement
• Add a Personal Umbrella

Discounts:
These are a few discounts that your policy may offer. It is always recommended that you consult with your agents to see which of these may apply to your policy.

• Gate Community Discount
• Security System Discount
• Multi-Policy Discount – When insuring your autos and your home with the same company
• Good Credit Discount

Payment Options:
Your Renters Insurance Policy has a few different payment options.

• Annual
• Semi-Annual
• Monthly

Recommendations:
These are a few recommendations we have regarding your homeowners insurance.

• Review your policy annually with your insurance agent.
• Complete a Contents Inventory Record in order to itemize your personal property, should you have a fire loss. Your agent should be able to provide a copy and will retain it for you.

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DISCLOSURE: All entries by QuoteFishing.com are for informational purposes only and it is always recommended that you consult with your local insurance agent as coverage, definitions and claims procedures may differ from state to state.