Renters insurance is a good idea if you don’t own your own home. If you have assets to protect, keep in mind that your landlord’s policy will not cover you for loss to your personal property.
Whether you rent a house or an apartment, renters insurance will protect you against loss or destruction of your possessions. A renters policy will also cover:
- Contents: Replaces your personal possessions when damaged or lost due to fire, theft or other covered peril, whether at home or away.
- Medical payments: Pays reasonable medical costs for a non-resident who suffers injury at your home. This valuable coverage can help prevent a minor accident from turning into a liability lawsuit.
- Liability: Provides your first line of defense when someone sues you for an accident that occurs at your rental home or through your negligence. It helps pay your attorney and court costs; your insurer will even help arrange your legal defense.
The cost of your rental insurance policy will depend on the type of coverage you select:
The basic “named perils” policy covers you only for loss or damage caused by one of the perils named in the policy (hence its name). These generally include fire or lightning, windstorm or hail, explosion, and more. A broad-form policy provides broader coverage, covering you for the named perils listed above, plus others, including damage from burglary; falling objects; freezing; electrical surges; and weight of ice, snow or sleet.
You may also be able to purchase an “all-risk” policy, which differs from a named perils policy by covering damage or loss caused by any peril, unless specifically excluded by the policy. Typical policies exclude losses due to earth movement, water damage, power failure, neglect, war, nuclear hazard and intentional loss. “All-risk” coverage costs more, but provides more comprehensive coverage.
Another choice that will affect cost is whether you purchase actual cash value or replacement cost valuation.
- Actual Cash Value: Your possessions are replaced minus a deduction for depreciation.
- Replacement Cost: Your possessions are replaced for their actual cash value with no deduction for depreciation.
No matter which features you select, purchasing renters insurance will usually cost only a few dollars a week. Since standard renters policies do not cover or cover for only limited amounts valuable items such as jewelry, silver, art, musical instruments and so on, you may want to consider purchasing a personal articles floater for these items as well.