Renters insurance 101

Should you cover your rentals?

What is Renters Insurance? 

Renters insurance, or HO-4 insurance, protects renters from financial burdens that happen due to perils like theft, fire, liability, lawsuits and more. You can purchase a standard renters policy and protect yourself from a pre-described set of perils, or you can also tailor your policy according to your needs.

In this article

Renters Insurance vs. Condo Insurance

Most insurance seekers may see renters insurance and condo insurance as the same thing, but it is not the case. You cannot expect your condo insurance to cover for your losses from your rental residence. Here are a couple differences between the two: 

  • Condo insurance is for people that actually own their unit. Renters insurance is for people who are living in the unit, but do not own it.  
  • Renters insurance will not cover for the damage to the dwelling. Condo owners own everything in the unit, so their insurance has dwelling coverage. 

Why do you Need Renters Insurance?

Your landlord may have provided you with shelter, but he won’t provide you with compensation if things go wrong. This is why you must have renters insurance. Did someone break in and steal your laptops and TV? Renters insurance will reimburse you. Did your dog unexpectedly bite a guest, sending them to the hospital for stitches? Renters insurance will help cover medical expenses.  Are you temporarily living in a hotel because the kitchen was damaged in a fire and is being repaired due to ? Renters insurance will cover your hotel bills and may even reimburse you for your meals! 

who needs renters insurance

What Does Renters Insurance Cover?

 Here are the three key components of renters insurance coverage:

Personal Property

While your dwelling isn’t covered, your belongings and possessions are covered from theft, riot, fire, falling objects, etc. Naturally, flood and earthquake are not covered, but can possibly be added for an additional fee as an endorsement. You get to choose between two reimbursement options: actual cash value and replacement cost coverage. An actual cash value policy will reimburse you the exact amount of cash you paid for your belongings. Replacement cost coverage will replace the exact item that was damaged.

Renters property coverage will cover your property even if it is stored away from home. Suppose your laptop is stolen during your commute home. Renters insurance will take care of the expenses incurred to replace it.

Moreover, other people’s items in your home are also covered. Let’s say your friend loans you their laptop, but a burst pipe damages it. Your friend’s laptop is covered under your renters insurance policy.

 

Liability Coverage

Renters liability insurance will cover the expenses of your guests if they suffer injuries in your home. This coverage covers their cost of their medical and legal bills.

Suppose your friend comes to visit you one day, and accidentally trips and falls. They have an injured knee, and need medical attention. Your renters insurance will take care of the fees. If they file a lawsuit against you, your coverage will also cover a portion of the cost.

Suppose a fire breaks out in your apartment, reaches your neighbor’s premises, and harms them, then you can rest assured that your renters insurance policy has your back.

 

Additional Living Expenses (ALE)

If something happens to your residence that isn’t your fault, and makes your home uninhabitable, then your expenses for living temporarily away from home will be covered by your renters insurance coverage. This means, your hotel bills, meals, temporary rentals, and such are covered under your insurance coverage.

For example, a pipe bursts in your apartment, and you need to stay at a hotel while the damage is being repaired. You are now paying for the hotel, your meals out (no kitchen at the hotel), a long commute, and other expenses which may not have happened if it wasn’t for the damages in your apartment. With apartment renters insurance, your expenses will be covered.

Why do you Need Renters Insurance?

Your landlord may have provided you with shelter, but he won’t provide you with compensation if things go wrong. This is why you must have renters insurance. Did someone break in and steal your laptops and TV? Renters insurance will reimburse you. Did your dog unexpectedly bite a guest, sending them to the hospital for stitches? Renters insurance will help cover medical expenses.  Are you temporarily living in a hotel because the kitchen was damaged in a fire and is being repaired due to ? Renters insurance will cover your hotel bills and may even reimburse you for your meals! 

what is renters insurance

What Does Renters Insurance Cover?

 Here are the three key components of renters insurance coverage:

Personal Property

While your dwelling isn’t covered, your belongings and possessions are covered from theft, riot, fire, falling objects, etc. Naturally, flood and earthquake are not covered, but can possibly be added for an additional fee as an endorsement. You get to choose between two reimbursement options: actual cash value and replacement cost coverage. An actual cash value policy will reimburse you the exact amount of cash you paid for your belongings. Replacement cost coverage will replace the exact item that was damaged.

Renters property coverage will cover your property even if it is stored away from home. Supposeyour laptop is stolen during your commute home. Renters insurance will take care of the expenses incurred to replace it.

Moreover, other people’s items in your home are also covered. Let’s say your friend loans you their laptop, but a burst pipe damages it. Your friend’s laptop is covered under your renters insurance policy.

Liability Coverage

Renters liability insurance will cover the expenses of your guests if they suffer injuries in your home. This coverage covers their cost of their medical and legal bills.

Suppose your friend comes to visit you one day, and accidentally trips and falls. They have an injured knee, and need medical attention. Your renters insurance will take care of the fees. If they file a lawsuit against you, your coverage will also cover a portion of the cost.

Suppose a fire breaks out in your apartment, reaches your neighbor’s premises, and harms them, then you can rest assured that your insurance policy has your back.

Additional Living Expenses (ALE)

If something happens to your residence that isn’t your fault, and makes your home uninhabitable, then your expenses for living temporarily away from home will be covered by your renters insurance coverage. This means, your hotel bills, meals, temporary rentals, and such are covered under your insurance coverage.

For example, a pipe burstsin your apartment, and you need to stay at a hotel while the damage is being repaired. You are now paying for the hotel, your meals out (no kitchen at the hotel), a long commute, and other expenses which may not have happened if it wasn’t for the damages in your apartment. With apartment renters insurance, your expenses will be covered.

What is not Covered?

Of course, not all risks are covered by renter insurance. As stated earlier, flood and earthquakes are excluded from coverage, but can be added on as an endorsement for an additional fee. Liability coverage for intentional loss and damages incurred under the influence of substances are not covered as well.

what does renters insurance cover

Property damage

Since you do not own the property, property coverage is not necessary for you. Your landlord probably already has that covered in their insurance, so you are off the hook.

Flood, earthquake, and other specific natural disasters

The standard tenant insurance excludes these natural disasters, but some companies will allow endorsements.

Pests

Rodents, bed bugs and other pests will not be covered in your standard policy. In case you want to get rid of the pests, your insurance will not cover for an exterminator either. Think carefully before investing in a rental with a pest problem, as damages thus incurred are not covered.

and undocumented items

Unless your roommate is in some way related to you by marriage or blood, they are on their own if they suffer losses. Your insurance cannot help them out, unless they are specifically listed on your policy. Know that adding them will cost you extra. We suggest that each tenant get themselves covered with their own policies.

If your possessions are stolen from your apartment your insurance will help cover the losses, but not if you don’t have proof that you own it. Traditionally, you will be asked for receipts. However, if you have pictures of the possession in question, it may be sufficient.

Car damage

Your possessions are still covered by insurance if they get stolen from your car. However, your car itself is not covered. You’ll need car insurance to physically protect your car.

Renters insurance is a necessity, not a luxury. You need to protect yourself and your possessions from threats all around you. We can help! Here’s a list of our partners.

Keep yourself from drowning in financial trouble.
Sail away! Get a quote for your boat!
Does renters insurance cover spoiled food?

Yes, your renters insurance will cover for your spoiled food if your food storage units are damaged by a covered peril.

Does renters insurance cover bicycles?

Yes, as long as your property and belongings are damaged due to named perils.

How much will renters insurance cost me?

It depends on the state you live in. According to the Insurance Information Institute, the Average rental insurance premium for Louisiana is $235, whereas the same for Minnesota is $140

Keep yourself from drowning in financial trouble.
Sail away! Get a quote for your boat!