Updated: Apr 24
What is a Renters Insurance?
It is also referred as a Tenant Insurance or HO-4 insurance policy. Many renters think that their landlord's insurance policy will cover all their belongings, which is not really true. If you are currently renting an apartment or home and for any reason, your home is destroyed by catastrophic events or affected by theft, vandalism etc, it helps protect your Personal property. It may also provide protection to you if someone gets hurt in your apartment, condo or home against any claims. It protects you against liabilities.
The renters insurance and coverage are very similar to Homeowners Insurance except the coverage doesn't include the Dwelling structure and other structures as the policy holder does not own the home. Some insurance coverage may also provide living expenses if the residence you rent is unlivable in any ways.
What does it Cover?
Typically, a standard Renters policy covers Personal Property, Liability and Living Expenses. A Renters Policy is usually cheaper than the Home owners Policy as the external building or structure is not covered.
Personal Property coverage
These are the following perils that are usually covered by the policy, coverage may vary upon the policy, policy provider and coverage limit.
Fire or lightning
Windstorm or hail
Weight of ice or snow
Water overflow discharge
This coverage helps cover the contents or personal belongings of your home such as clothes, furniture, electronics etc. If the damage is caused by the named peril outlined in your insurance policy. If your home is prone to any perils that are not outlined in your policy, it may be added as an additional coverage to your policy. The insurance does not cover all the items you own and certain valuables such as Jewellery, art work, paintings etc may be beyond the coverage limit.
In this case, if you want those items to be covered under your policy, you may add an additional coverage called as the Scheduled Personal Property Coverage. The coverage for the damaged items may be compensated as the actual cash value or replacement cost depending on the policy.
This is another coverage that is usually included in the renters policy which helps you from paying out of pocket for the damage caused. It provides coverage in cases where you are legally responsible for the damage.
For example, if a guest trips on your rental home or apartment, falls and gets hurt, this may cover the medical bills. If your child accidentally breaks your neighbors window, this may cover the cost for the damage. The amount of coverage obtained is purely based on the type of policy, policy provider, coverage limit etc.
If your dog caused some serious injury to your visitor, it may also help you cover the costs against any lawsuits, legal fees, court costs, medical expenses. The typical coverage limit in Standard Renters Policy is usually $100,000. This coverage limit can be extended to higher limits through Umbrella Insurance Policy. If the damage caused is $150,000, then the excess $50,000 may be covered by your Umbrella policy.
Additional Living Expenses
If your rental home or apartment becomes unlivable by the damage of any covered peril, then the renters insurance may help cover the costs of the living expenses until your rental home or unit is being repaired and livable. This is also called as Loss of use Coverage.
You may have additional rental expense to get a similar kind of home with same number of bedrooms or you may have additional food expenses above your normal spend, the amount of loss of use coverage you get compensated depends on the policy.
These coverage can be added on to the standard insurance policy as an endorsement to increase the coverage and better protect your rental home. These additions depends on the specific needs of an individual renter. They vary depending on a number of factors. Some of these coverage may not be available under your policy or you may not be eligible for receiving the coverage.
Endorsements and Floaters
Endorsement and floaters are an additional insurance coverage for a specific high priced item for which the coverage limit under the standard policy is way below. In this type of coverage, the specific item such as jewellery, art work etc must be taken to be appraised, Once appraised, the insurance company will determine a premium based on appraisal value.
Damages caused by floods are not covered by the standard renters insurance policy. Depending on the location and chances of getting flood damage, it is advisable to get a separate Flood Insurance Policy. You may also have an option to add on the flood insurance to your renters policy.
Damages caused by Earthquakes are not covered by the standard renters insurance policy. Depending on the location and chances of getting earthquakes, it is advisable to get a separate Earthquake Insurance Policy. You may also have an option to add on the Earthquake insurance to your renters policy.
Mold damages are covered only if the damage is caused by any of the covered perils like leakage of the plumbing system etc. Mold caused by negligence and poor maintenance, flood damage are not covered by the standard renters insurance.
The pet damages like damage to the carpet, claw marks on the wall or other destruction may be covered by adding a pet damage endorsement to your policy. It helps cover the costs of repair or cleanup.
Water Backup Coverage
If your clogged sink, bathtub or toilet overflows gushing water into your home, this endorsement may help cover the repair costs.
Filing a Claim
If your rental home is damaged by a covered peril, it is very important to file a claim as soon as possible after collecting necessary proofs and documents needed like photos, videos or description of the event with as much details as possible. Most of the insurance companies have a specific time frame within which the filing has to be done. Sooner you start, sooner you will be compensated for your damage or loss. The claims adjuster assesses the damage and once your insurance provider approves payout, you will be receiving the check for the compensation amount minus the deductible.
The events and items covered by your insurance policy differs based on your policy and insurance provider. The conditions and limitations of the coverage vary upon your specific policy. Inform insurance company ahead of time if you have any expensive structures in your property. This will act as a documentation for coverage in case any mishap happens.