A Quick Guide To Renter's Insurance

Are you a tenant? If yes, then you must be aware that a landlord cannot ask you to pay for wear and tear damages, such as worn carpets, scrapes on walls, dirty windows, minor cuffs, and faded curtains. But tenants are responsible for repairing any damage caused by themselves, their visitors, and their pets. Hence, tenants should have a renter's insurance policy for financial protection.  

But to what extent can a renter's insurance protect you? Also, many people ask this question, 'Does renters insurance cover liability?' With detailed legal matters associated with an accident in the rented unit, a personal injury lawyer can help.  

Read this quick guide on renter's insurance to help you decide more on what coverage to look for as a tenant.  

What Is Renter's Insurance? 

Investopedia defines renter's insurance as a form of property insurance. It protects tenants who rent condos, apartments, and houses. Renter's insurance policies cover personal possessions, additional living expenses (ALE), and liability claims when a unit sustains damage. Many landlords and property managers require new tenants to present proof of renter's insurance before handing over the keys. 

Standard Renter's Insurance Coverage 

A standard renter's insurance policy covers the following: 

1. Personal Property  

If a fire, lightning, vandalism, explosion, or any untoward event damage your clothing, appliances, gadgets, and other belongings, your renter's insurance will cover you. But a deductible applies, and expect a limit on coverage outside the home, usually 10 percent of the tenant's total personal property limit. 

2. Additional Living Expenses 

Accidents happen in rental properties. So, tenants must protect themselves from the costly expenses of natural disasters and other unfortunate events by getting a good renter's insurance coverage. If lightning strikes and causes fire in your apartment, expect to be out for major repairs for a few days or weeks. Your renter's insurance coverage will pay for restaurant meals, accommodation, and other expenses when you temporarily reside elsewhere during unit repairs. 

3. Liability 

If you have a dog and it bites another tenant or a visitor, you're responsible for paying the medical expenses or hospitalization of the victim. Without renter's insurance, you would pay thousands of dollars for a hospital stay. The average dog bite hospital cost is USD$23,680, and dog bite injuries comprise 85 to 90 percent of animal bites in the country.

Renter's insurance is important because it pays out victims if you're responsible for dog bites and other injuries to other people and any damage to their property. 

4. Medical Payments  

This coverage pays for the medical expenses if an individual gets hurt in your rented place. Unlike liability coverage, the insurance company pays for the medical expenses regardless of who's at fault. Moreover, liability coverage has a higher limit than medical payments. 

Optional Renter's Insurance Coverage 

Depending on your preferences, you can customize your renter's insurance coverage. Here's a quick list of the optional coverages you can add and pay extra for your renter's insurance coverage: 

• Replacement Cost Coverage 

A standard renter's policy pays the cash value of a damaged possession in the rental unit, which may not be enough to buy a new replacement. If you want your policy to cover new replacement items, you can pay extra for replacement cost coverage. 

• Scheduled Personal Property 

You can obtain extra coverage for your gold coins, jewelry, firearms, watches, and other valuable items by getting a scheduled personal property coverage. 

• Identity Theft Coverage 

This optional coverage covers the cost of credit monitoring services, legal fees, and document replacement due to an identity theft incident. 

• Water Backup Coverage 

Have you experienced water backup in the past? It's a nightmare. Drain backups can be messy and expensive to repair. Avoid dealing with the same issue by paying extra for water backup coverage can help offset the cost associated with toilet or sink water backup.   

• Pet Damage Liability 

Your pet can be the cause of damage in your rental unit. It can leave claw marks on the carpets and walls. A pet damage endorsement can help cover cleanup and repair expenses, saving you from spending your security deposit. 

What Renter's Insurance Doesn't Cover  

Insurance policies have exclusions. The same holds with renter's insurance. Generally, the renter's insurance policies don't cover flood damage, infestations, earthquake damage, and the roommates' belongings. Ask your insurance to provide specific exclusions in your policy to avoid future problems. 

Conclusion 

Renter's insurance protects tenants from liability claims and other rental-related incidents. Your renter's insurance policy depends on the coverage you choose—the more coverage, the higher your premium. Talk to a reputable renter's insurance agent or research offerings from different insurance companies to determine the best coverage.