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Does your renters insurance policy offer enough protection?
Renters insurance covers you, your liability, and your belongings in the event of a covered loss.
Below is a list of typical covered — and not covered — losses. Renters insurance coverage is broken down into four coverage types: personal property coverage, personal liability, additional living expenses, and medical payments. In this article, we will define each of these coverage options, how much coverage they include, and what they cover.
Covered by renters insurance
Fire and lightning
Ordinance of law
Wind and hailstorm
Water (flood damage)
Riot or civil commotion
Vandalism or malicious mischief
Wear and tear
Weight of ice, snow, or sleet
Accidental discharge or overflow of water or steam*
Sudden and accidental damage from artificially generated electrical current
Freezing of HVAC system
*Damage from plumbing, heating, air conditioning, or automatic sprinkler system.
Renters insurance covers personal belongings up to a predetermined coverage limit. The amount of renters coverage is defined by the insurance policy and may total 10% of the policy's personal liability coverage. For example, a policy with $100,000 of liability coverage would include $10,000 of personal property coverage.
"Personal property" is a vague term. It can refer to clothing, furniture, art, electronics, or anything else owned in a rental house or apartment. This coverage may come with restrictions, called "special limits on liability."
Policy documents should detail these restrictions. Below are a few common restrictions.
|$200||Money, Gold, Coins|
|$1,500||Jewelry, watches, furs||Theft only|
|$1,500||Watercraft, trailers||Theft only|
On- and off-premises refers to the address listed on the policy. Renters insurance partially covers the insured party away from their rental property. Off-premises coverage typically only protects against theft.
In addition to any damage caused by the above list of exclusions, the following items of personal property are excluded from coverage, regardless of the source of damage.
In the same way that personal property protects belongings, liability coverage protects you. If you cause bodily injury or damage someone’s personal property, liability coverage can cover the costs — including legal fees. Liability protection covers damages up to the liability policy limit, which is variable. A typical liability limit is $100,000. This coverage follows the insured party around the world at the same coverage amount.
This coverage pays for the medical expenses of an injured party — not the insured — if the injury occurs on the insured’s rental premises or as a result of the insured’s actions.
Renters medical payment coverage includes:
The medical payments limit — which may vary — exists on a per-person basis. A typical limit is $1,000.
If the apartment or house you rent is deemed unlivable as a result of a covered loss, additional living expense coverage will cover the costs of residing elsewhere, up to the policy's coverage limits. Depending on the insurance provider, this coverage could be referred to as "loss of use."
The coverage options listed above are standard in many renters’ policies. However, optional coverage options are worth considering.
Most insurance companies have an option to upgrade reimbursement coverage from Actual Cash Value (ACV) to Replacement Cost. An ACV policy considers depreciation in reimbursement. Replacement cost pays the current market value of personal items. An ACV payout will usually be worth less than a replacement cost payout.
Depending on location and insurance company, earthquake coverage is an optional addition to a renter's policy. If you live in an earthquake-prone location, speak to an insurance agent about adding this coverage.
If your rental unit is damaged by a sewer backup, you likely will not have coverage without this option. This covers the damage caused by water from a sewer or drain. If a sump pump breaks and causes your living room to flood, this coverage would kick in and cover repairs to your personal possessions.
A rider — also known as a floater or endorsement — extends the special limits of liability on your personal items. If you have expensive items such as jewelry, coins, or art, consider this coverage. If you have valuable items, such as an engagement ring, add a scheduled endorsement to your policy. A scheduled endorsement requires an appraisal, but is essential for high-value items.