Understanding Renters’ Insurance
Finally renting your first home is a big event in life. But it is important to keep in mind how you might fare financially should an accident or some other event strike that leads to loss while you are inhabiting the dwelling. By obtaining good renters insurance, you can keep your personal belongings protected while potentially saving notable amounts of money over time.
Who needs Renter’s Insurance?
Renters insurance is distinguished from homeowner or car insurance since renters’ insurance will only cover the policyholder’s personal belongings within the walls of the rented home. The landlord will normally have a policy that covers the actual structure and other components but this coverage is not meant to protect the tenant. Should an accident, fire, (or individual) destroy any of personal belongings, then only renter’s insurance will compensate one for lost or damaged items.
Many are under the erroneous impression that their things are not worth much, but a person would be wise to consider the total dollar amount it would take to replace all of it. Most renters certainly couldn’t find that kind of money without breaking the proverbial bank. Also, and quite importantly, a renter’s insurance policy can provide coverage to you if someone were to injure themselves while inside your home and sue. Remember that this coverage is important enough that some landlords may require that you obtain it before renting. In addition to it covering you in the case of an injured party filing a lawsuit against you, it can pay for your legal costs, up to the policy limits. And good renters’ insurance can also provide for living costs should your rental dwelling be rendered uninhabitable due to a covered claim.
Usually a renter’s policy will cover losses resulting from such things as fire, theft, vandalism, minor flooding, and severe weather events. However, this policy like others, will normally exclude such natural disasters as floods, hurricanes, or earthquakes. These events will usually need to be covered by separate policies and, depending on where you live, these additional coverage choices could be vital.
How it Works
Renter’s coverage is for those who live in a home that they do not own. If you own property that you rent out, the coverage you need is that of a landlord policy, not a renter’s policy. If you ever need to file a claim, you will first have to pay a deductible. The deductible on your policy is the amount you must first pay before your insurance plan starts to pay out. Generally, the larger the deductible, the lower the premiums will be.
The major plus of a good renter’s insurance policy is the peace of mind in knowing that you have the financial protection you need in the event of some loss. Another benefit is that renter’s coverage is relatively affordable, yet very helpful when needed.