The Basics Of Renters Insurance

The type of insurance covering a renter’s personal belongings and property liability is known as renter’s insurance. Landlords are increasingly requiring that tenants have renter’s insurance. Such a policy insures the tenant against loss of physical property due to fire, flood, vandalism or theft. Additionally, the tenant is protected against liability claims due to on-premise injuries such as slip-and-fall.

The renter will want to choose a policy with appropriate coverage — the Goldilocks policy is not too big, not too small. Underestimating coverage needs could leave the renter exposed to financial loss; however, overestimating coverage needs would be a waste of money month after month. Online tools are available to tally the replacement costs of electronics, appliances, clothing, and so on. Mobile apps are also available, enabling the renter to go room by room, category by category, entering each item for which coverage is desired.

Depending on the specific circumstances, the renter will have to consider all possible causes of loss: theft, vandalism, fire, lightning, smoke, water damage, earthquake damage, and other perils.

There are four types of coverage the renter will choose from. First, covering personal property means insuring furniture, appliances, clothing, musical equipment, jewelry, etc. Second, liability coverage protects the renter against legal claims due to property damage or bodily injury resulting from some incident on the premises. Third, covering medical payments means insuring against medical costs for any guest injured on the premises, whether or not the tenant is liable. Finally, loss of use coverage means the tenant is protected against the cost of being displaced in event of severe damage to the residence.

The renter may also pay for extended coverage — known as a floater or rider policy. This would be appropriate if the tenant needed to cover a piece of fine jewelry, a rare stamp collection, or similar high value item.

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