How Does Renters Insurance Work?
When you move into an apartment and sign a lease, you are making a legal contract between you and your landlord regarding your stay in rented space. Upon signing that lease, there will usually be a section that explains your responsibilities as a tenant. While it’s a no brainer that landlords expect you to pay your rent on-time and keep your space tidy, many tenants overlook the insurance portion of the document.
In fact, according to a survey conducted by Princeton Survey Research Associates, 6 out of 10 adults do not have renter’s insurance. This staggering statistic can be explained by the spread of misinformation and inaccurate assumptions.
What is Renters Insurance?
Purchased by the tenant, renters insurance covers your personal belongings should they be damaged as a result of fire, theft, vandalism or water damage. Renters insurance, which on average costs less than $200 per year, will either repair or provide a lump-sum payment for items unable to be salvaged. Quite often it is nearly free when combined with an automobile policy and there are discounts available on both.
Consider this, take your apartment, turn it upside down and shake, everything that falls out is your responsibility to insure. These policies can also be customized with add-on features depending on the value of the property. For example, a valuable items plus provides higher limits for more expensive items, such as jewelry or fine art.
Types of Personal Property Coverage
Actual Cash Value – A type of personal property coverage selected by the insured that issues the owner a check for the “actual cash value”, which is a fancy word for the replacement cost of the item minus wear and tear. This type of coverage is less commonly chosen and almost never issued by H&K insurance.
Replacement Cost Coverage – Requires the insurance company to issue you a check for the amount it would take to replace the damaged item with a new item of similar taste. Premiums are usually higher for this coverage. This is the type of coverage we recommend and is issued in most of our policies. Check your policy to be sure you have it, or give us a call.
What Does Renters Insurance Not Cover?
There are certain cases where a renter’s insurance policy will not cover a claim filed, such as in one of the following scenarios listed below. To protect yourself in these situations, you need to purchase additional insurance coverage separate from the renter’s policy.
- Damages caused by floods
- Negligence on behalf of the tenant
- Damages from running a business or professional services from your apartment
Others Ways Renters Insurance Can Protect You
Besides coverage for your personal belongings, a renters insurance policy can also protect you in others ways that you don’t know about.
Additional Living Expense Coverage – If your apartment is too damaged to live in after a covered loss, such as a fire, this portion of your renter’s policy can cover additional expenses that you incur as a result of this unfortunate event, such as hotel accommodations, food or childcare services.
Guest Liability Protection – This portion of your policy protects you should a third-party, such as a family member or friend, injure themselves in your apartment and you are found legally responsible to pay for their medical costs and lost wages.
To learn more about renters insurance or to receive a free quote, contact H&K Insurance today by dialing (617) 924-5600.
