Renters insurance coverage can be an ideal safety net for your personal belongings. It can cover a broad range of valuables you’ve acquired over time against loss resulting from theft or damage due to a fire or natural event. The right renters policy would provide this financial protection wherever the loss occurs, be it in your house, personal car, store, or a friend’s home.
What Is Renters Insurance?
Renters insurance is a policy that covers the loss of your personal valuables and shields you against accidental liabilities within your house that aren’t the building owner’s fault. You can’t count on landlord insurance to protect your belongings. The policy only covers damage to the rental house you’re living in and any bodily injury claims for which the landlord is liable.
You’d need renters insurance for these key protections:
- Personal property coverage against theft or damage by a covered event like vandalism or fire
- Liability coverage pays for valid claims against you, such as damaging somebody else’s property or someone getting bodily injuries at your home
- Additional living expenses coverage reimburses the cost of temporary relocation (accommodation) while your uninhabitable house is being repaired.
Does Renters Insurance Cover Theft from a Vehicle?
Yes. The right renters insurance coverage would include personal possessions damaged in or stolen from your car, moving van, or recreational vehicle. It can cover various types of belongings, such as:
- Manufacturer-installed car stereo
- Your luggage
- Musical instruments
Replacement Cost vs. Actual Cash Value: Which Policy Should I Get?
With a replacement cost policy, you’d receive a compensation amount equivalent to the full cost of replacing the lost or damaged property with a brand new one. Actual cash value (ACV), which is about 10% cheaper, is the depreciated value or market price of the property at the time of loss. The extra premium for a replacement cost policy may be worth it if you’d prefer to get a brand new item rather than an old depreciated one just to save a few hundred dollars.
What Is Excluded from Renters Insurance Coverage?
Like all other policies, a standard renters insurance policy has its coverage limits and specific hazards that it won’t cover. Most policies don’t cover valuable or expensive items whose value exceeds existing coverage limits. Such possessions include:
- Fine art
- Vintage collectibles
- Music instruments
- High-end electronic equipment
- Costly Jewelry
To cover any of these valuables, you may need an insurance rider.
Standard renters insurance doesn’t typically cover the following events:
- Property damage due to sewage backup
- Natural disasters like floods and earthquakes
- Intentional damage/vandalism by the policyholder
- Loss/damage due to the policyholder’s negligence
For an extra cost, you can expand your renters insurance coverage to include events like floods.
How Do I Personalize Coverage with Riders or Endorsements?
Riders and endorsements are the best options to customize your policy for your exact coverage needs. With these solutions, you can expand protection to include valuable possessions. Also, an earthquake or hurricane endorsement can cover your personal properties against possible loss associated with these perils.
Your insurance agent can help you assess your unique coverage needs in the following ways:
- Help audit your possessions to identify any high-end valuables that don’t automatically qualify for standard coverage
- Assess your specific risks based on where you live, such as your flood zone