Renters Insurance 101
You work hard to pay your rent and buy things to furnish and decorate your home. And just because you don’t own the property you live in, that doesn’t mean that you don’t have anything worth protecting. Renters insurance allows you the protection of your financial future that you need—even when you don’t own property. If you are considering renters insurance for the first time, then there are a few things you should know before meeting with your agent.
Lesson 1: Contents
One of the main priorities for many renters insurance shoppers is to get protection for their possessions. Their furniture, stereo equipment, computers, jewelry—all the stuff that sits inside the apartment exposed to risks all day. The contents coverage in a renters insurance policy covers all these items. But that is a really short list. Contents covers everything you own within the apartment, unless is it expressly excluded in the policy. From small appliances to clothes, area rugs to wall hangings—everything that is yours. Contents coverage does not cover the appliances in the apartment if they belong to the property owner. It also does not cover furniture in apartments that came furnished. It is simply meant to give you, the renter, protection for those items you own—not from your liability to any damage that occurs to the landlord’s property.
Lesson 2: Liability
While in your apartment, any number of events could occur that cause damage to your landlord’s property. Floods, leaks, and normal wear and tear are all expected and are considered to be the landlord’s responsibility to cover financially. But what if you do something negligent that exposes your landlord to damages they otherwise would not have endured? For instance, let’s say you leave the bathtub running and it spills over and ruins your floor—and your downstairs’ neighbor’s ceiling? Or you overcook some pasta and start a fire? The damages from these events would be considered your fault and you, therefore, would be liable to pay for the damages that they cause. With renters insurance liability coverage, you have a recourse to help you pay your landlord back for these damages without reaching into your own pocket.
Lesson 3: Loss of Use
There are many events that can happen which are completely outside your control—and when you live in an apartment, there is even more opportunity for these uncontrollable events to occur. So if your apartment should become uninhabitable through no fault of your own, for instance if your landlord wants to tent the building or there is a fire that displaces you, then loss of use coverage will pay a reasonable amount for your temporary living arrangements.
Lesson 4: Medical Payments
If someone is injured in your apartment, through no fault or neglect of your landlord, then you could be found responsible for paying his or her medical bills. Medical payments coverage in a renters policy will make these payments for you so that you do not have to pay out-of-pocket.
Lesson 5: Deductibles and Limits
When you take out your renters insurance policy, you will be asked to choose a deductible and a limit for the coverages you choose. Your deductible is the amount of money that you must pay out-of-pocket before the insurance company will step in and make payments. Choosing a high deductible lessens the insurance company’s risk and will result in a less expensive policy, but it will also mean that you have more financial responsibility when things go wrong.
Your limits are the maximum amounts that your renters insurance policy will pay for each type of claim. If your limits are low, it will result in a less expensive policy since the insurance company will be guaranteeing smaller payments for insurable events, but it could also mean that you don’t get reimbursed as much as you should when things go wrong, or that you have more personal liability if your limits are lower than you are found to owe for medical payments or damage to the property.
You take your life seriously. You get up for work every day, pay your bills—heck, sometimes you even force down a vegetable at meal time. If you haven’t already, it might be time for you to take the next step in taking your life seriously and get a renters insurance policy. After all, it is one of the best ways to protect and preserve your financial future.