What Does Renters Insurance Cover – F.A.Q.
What is Renter’s Insurance?
Renters insurance is just like a homeowner’s insurance policy because it protects a renter’s assets as well as covers the liabilities from accidents that can occur. Damages to rental property can occur in several ways. Liabilities like accidental falls by guests and other potentially expensive claims can be covered under a rental property policy as well.
What Does Renter’s Insurance Cover?
Insurance policies cover a variety of conditions and issues that renters confront including losses from fire and personal injury claims. Listed below are the main areas renter’s insurance policies cover:
- – Furniture, clothing, electronics, kitchen appliances, and other personal property.
- – Injuries and damages caused by accidents in the renter’s apartment or home.
- – In the event there is damage that requires the renter to live elsewhere while repairs are made.
- – Coverage for events like tornadoes, wildfires, and wind damage.
- – Losses occurring due to theft of personal property or vandalism to property.
What Renter’s Insurance Doesn’t Cover
There are limitations to what a renter’s policy covers and most policies don’t cover some events that can be covered under a separate policy such as:
- – A separate insurance policy for flood protection must be purchased.
- – Policies don’t cover actual property damages to the structure because the landlord’s insurance usually covers those losses.
- – Like earthquakes, damages from sinkholes are covered under the landlord’s building insurance policy.
- – Many policies exclude jewelry and artwork unless it is professionally appraised and specifically identified in the policy.
How Does Renter’s Insurance Work?
Policy coverage varies from insurance company to insurance company, Renters determine the amount of coverage needed based on the value of their possessions to be covered. A decision must also be made concerning the amount of liability insurance coverage desired for medical and other damages arising from a personal injury accident. Insurance policy coverage is regulated in each state and all insurance companies offering policy coverage in each state must meet the state’s guidelines and coverage regulations. For the most part, renters have a broad choice of providers that insurance policies can be purchased from. In general, three issues must be decided by renters:
- – Renters must total up the values of furniture, electronics, clothing, and other items.
- – Establish policy limits for accidental injury and damage claims.
- – The amount of deductible applied to the policy that renter pays before policy coverage kicks in.
Is Renter’s Insurance Necessary?
For many landlords, renter’s insurance is a necessity as it protects them from claims by the tenant or their guests in the event of damages. Just like a homeowner’s insurance policy covers them for accidents, damages, and losses, a renter’s insurance policy does the same thing, even though they don’t own the property they are living in. Protecting personal possessions from theft, loss, or damage is a smart way of guaranteeing the renter’s quality of life won’t be affected by a loss. Insurance coverage usually extends to theft of personal property from a vehicle as well as paying for medical bills that may arise from an accidental injury to a guest or visitor. Unless a renter has substantial financial reserves, a renter’s policy is the best hedge against catastrophic losses.
Why is Renter’s Insurance Important?
When an accident or loss occurs, the costs for medical care or to replace personal property can be quite high. Just as automobile insurance guards against financial losses from car accidents, renter’s insurance accomplishes the same thing for a renter’s living space from financial loss. Accidents and damage occur without warning and a set limit to their costs and so insurance is the only way to safeguard against financial ruin from unexpected events. Renters are smart to review their policy regularly to ensure adequate amounts of coverage. Changes in personal assets, family size, and other factors influence the costs and coverage of a renter’s policy.
How Much Does Renter’s Insurance Cost?
Policy coverage amounts vary from insurance company to insurance company. However, most policies cover renters with the same general coverage for set prices. Renters can expect to pay between $12 to $20 per month for a basic policy, depending upon the amount of coverage and deductible. That comes out to approximately $150 to $250 per year. Renter’s insurance can often be purchased as an add-on policy to a renter’ s automobile insurance policy, which can save money. The cost of the policy is also determined by the type of policy purchased::
- – The amount required to purchase another item to replace the damaged or stolen property.
- – The amount the damaged or stolen item cost to purchase originally.
*Please note – Policy costs are directly affected by the amount of deductible applied to the policy. The higher the amount of deductible to be paid by the renter, the lower the overall policy cost will be.
Do Landlords Require Renter’s Insurance?
Many landlords require renter’s insurance to reduce their risks from occupancy damage and liability. Some landlords require renter’s insurance as a prerequisite to renting a property while others don’t require insurance at all. There are situations where landlords can assist renters acquiring a policy through their own insurance coverage, but most states require renter’s insurance be purchased separately and apart from a landlord’s policy to simplify the claims process.
How Much Renter’s Insurance Should Be Purchased?
Each renter has different amounts of personal property and works within their personal budget. It’s important to purchase sufficient insurance coverage for the property and liability concerns but not to buy unneeded or unnecessary coverage beyond the scope of reasonable expectations. In other words, renters should purchase enough coverage to meet their needs. Depending upon the type of policy purchased, the insurance company will only provide payments in accordance with reasonable and actual costs. Like automobile insurance, coverage amounts for liability coverage in the case of accidents should be determined based upon the renter’s situation and potential liability.
How to Estimate Personal Property Value for Renter’s Insurance
The best way to determine insurance values on personal property is to consider the original purchase price and what value the items has retained since its purchase. A ten-year-old television or computer isn’t going to be worth much compared to modern devices and so the values for each need to be realistic and accurate. Replacement Cost Value is different from Actual Cash Value and each method will be used to establish claim amounts for lost, stolen, or damaged property. It’s important to remember insurance companies know what household items cost because they replace them all the time from claims filed. Renters should not try to overvalue their property as insurance companies will deny the claim if the values asserted are not reasonable. The same is true in the opposite and renters should not undervalue their property and risk not being able to replace the lost item in the event of a claim.
Is Renter’s Insurance Tax Deductible?
For the most part, renter’s insurance is not tax-deductible. The only exception to this rule is if the insured property includes a renter’s work office in which case the ratio cost of renter’s insurance can be included in the total costs for the home office on a tax return. Each policy is different and it is advisable to confirm policy coverage conditions and tax considerations before purchasing a renter’s policy.
Does Renter’s Insurance Cover Broken Windows?
Each insurance policy is different and coverage for things like broken windows or other damage to the rental property Some policies cover damage to a landlord’s property caused by the renter and other policies don’t. Broken windows, burnt carpeting, broken water pipes, and other damages are generally covered by a landlord’s policy but each insurance company has different guidelines for policy coverage and responsibility to repair damages to the property.
Does Renter’s Insurance Cover Fire Damage?
In most cases, renter’s insurance covers damages caused by fire and wildfires as well. In addition to property damaged by fire, policies also cover damages due to soot, smoke, and water used to put the fire out. Even if the fire is caused by the renter due to negligence or accident, fire coverage extends to all damages caused by flames and heat.
Does Renter’s Insurance Cover Theft?
Yes, renter’s insurance coverage includes theft of property from the rented property. In many cases, policy coverage extends to thefts of property from a renter’s automobile or trailer. Burglary and vandalism are covered events as well as damages that occur due to other types of losses. If a thief breaks a window and takes a laptop computer, the entire cost to fix the window and replace the laptop should be covered 100%, less any applicable deductible.
Does Renter’s Insurance Cover Temporary Housing?
When a rental property is damaged so much that the renter cannot occupy the residence while it is being repaired, a rental insurance policy will pay for temporary housing while repairs are completed. Policyholders should examine the policy terms closely to determine the amounts to be paid for housing, food, transportation, and other considerations that may arise from the loss claim.
Does Renter’s Insurance Cover Accidental Damage?
The whole purpose behind renter’s insurance is to pay for accidental damage to the rental property caused during occupancy. Renters purchase the insurance policy to provide compensation to themselves and their landlords in the event of an accidental loss like damage to the property. Landlords and tenants each should have policies that can cover accidental damage to the property. Some insurance policies outline specific coverage conditions when renters cause damage to the rental property, Many rental policies also cover damages that may occur In the event a policyholder causes damage to property other than their own.
Does Renter’s Insurance Cover Car Damage?
No, renter’s insurance does not cover damage to automobiles, unless that damage occurred in the course of theft of property inside the vehicle. Otherwise, automobile insurance would be the primary coverage to deal with damage to a vehicle owned by a renter. If a renter causes damage to a vehicle located on the rental property, the costs of repair may be covered by the renter’s insurance policy, however, each policy is different and should be closely examined to determine coverage inclusions and limits.
Does Renter’s Insurance Cover Storage Units?
In most cases, the property contained in a storage unit is covered by renter’s insurance policies. The items contained in a storage unit belong to the policyholder and, as such, are considered personal property. Although policies may differ, coverage usually includes personal items located in both an on-site and in an off-site storage unit. Renters are advised to catalog and inventory storage unit contents with photographic proof of contents retained in case a claim needs to be filed for losses.
Does Renter’s Insurance Cover Dog Bites?
Renters with dogs should purchase insurance coverage that includes liability for dog bites. Many rental property policies cover damages caused by dog bites, however, some policies exclude certain breeds of dogs from their coverage. Policy coverage should be examined closely to determine coverage limits and amounts. Most policies also cover damage that may be caused by dogs.
Does Renter’s Insurance Cover Bed Bugs?
Most rental insurance policies do not cover insect infestations like Bed Bugs and cockroaches. Other pests such as rodents, bats, and flies are not covered as well as the cost for removing the pests. The costs for temporary relocation to a hotel while pests are being exterminated may be covered under the rental policy but it is important to determine coverage conditions, amounts, and requirements before purchasing an insurance policy.
Does Renter’s Insurance Cover Flooding?
No, renter’s insurance does not cover the flooding caused by high water invading the property. Repairs for flooding caused by broken or leaking pipes are covered under the landlord’s property insurance. Damages to a renter’s personal property caused by leaking or broken water pipes are covered by their rental insurance. A separate flood insurance policy must be purchased to protect household contents and other vulnerable items.
Does Renter’s Insurance Cover Mold?
Rental insurance policies generally do not cover mold damage unless it is the result of a broken pipe or water leakage on the property. Cleaning and mold remediation costs should be the responsibility of the landlord or property owner in the event of broken pipes or water leakage. When mold damage occurs, a renter’s personal property can be affected which would allow the renter to file an insurance claim for the damages to their personal items.
Does Renter’s Insurance Cover a Hotel Stay?
When a rental property is damaged to the point the renter is unable to remain in the residence, renter’s insurance policies will pay for the costs of staying in a hotel while repairs are made. In addition to the cost of the hotel, many policies also cover the cost of food and transportation during the interruption. Each policy is different and should be examined to determine coverage conditions, amounts, and limits.
Does Renter’s Insurance Cover Pet Damage?
Damages caused by pets can be covered by renter’s insurance in most cases, however, certain breeds of dogs may be excluded from coverage. Damage to carpets, walls, doors, and other structural components on the property are normally covered but it is recommended pet owners notify their insurance carrier of the pets at the time of the policy inception to avoid any problems further downstream.
Does Renter’s Insurance Cover Personal Injury?
Yes, renter’s insurance is a valuable resource when personal injury accidents occur on a renter’s property. As with automobile insurance policies, renter’s insurance is designed to reduce financial risks personal injuries can cause. The high cost of medical care necessitates purchasing a renter’s insurance policy with adequate coverage limits as well as affordable deductible amounts for the insured party.
Does Renter’s Insurance Cover Carpet Damage?
Yes, renter’s insurance will cover damage to carpets and other floor surfaces caused by accidents, staining, and pets. Issues like mildew and mold that result from water damages or leaking pipes are not covered by renter’s insurance but should be covered by the landlord’s insurance policy. Repeated claims for replacing or repairing damaged carpeting or flooring can result in higher policy costs over time.
Does Renter’s Insurance Cover Hurricane or Tornado Damage?
Natural disasters occur all the time and damage that occurs as a result of disasters like hurricanes and tornadoes are covered by renter’s insurance. Damages to the physical property of the building are not the responsibility of the tenant and are covered by the property owner’s insurance. Damages to a renter’s personal property, costs to temporarily relocated, and other associated expenses can also be covered as well.
Does Renter’s Insurance Cover a Broken TV?
If a television or other electronic device is damaged as a result of the tenant’s or the tenant’s guest causing the damage, the TV can be covered. However, if the television breaks due to old age or failure of the electronics, the cost to replace the television will not be covered by the insurance policy. Renters are advised to catalog and inventory all electronic items with photographic evidence to reduce the time it takes to approve a claim and to receive compensation from a claim for damage to electronic equipment.
Where To Get Renter’s Insurance
Renter’s insurance is available through many major property insurance companies as well as from regional and local insurance providers. Renters can go to the following websites to investigate coverage, costs, and other important information from each of the listed insurers:
- Liberty Mutual
- State Farm
- American Family
Renter’s Insurance Can Save the Day
Rental property insurance for tenants is the best way to reduce financial risks and exposure to accidents and damage to personal property. No one can predict when a rental insurance policy will need to be utilized, but the question isn’t really if an accident or damage will take place, the question is when and how much will it cost to get things back to normal. The cost of a renter’s insurance policy when weighed against the potential damage caused by an accident is very small and the peace of mind it can provide can be quite valuable.