Renter’s Insurance – What You Need to Know

Renter’s Insurance – What You Need to Know


Renter’s Insurance Coverage – Is it Enough?

A staple element of renting a home in the US is taking out a renter’s insurance policy. While some people are in two minds over the worth of renter’s insurance, it’s sold as a virtual necessity to protect your belongings and make sure that an event outside of your control doesn’t leave you in financial trouble.

There are many benefits to renter’s insurance, but also some instances where being covered by the insurance policy simply doesn’t cut it. If you’re debating over the pros and cons of renter’s insurance and can’t quite make up your mind whether the insurance policy is right for you, then our article is here to provide some clarity on the matter.

What Does Renter’s Insurance Cover?

When you’re renting a property, there are two main types of insurance that will have an influence over the building and the contents inside, landlord’s insurance and renter’s insurance. Landlord’s insurance takes care of the actual building, which your landlord will have taken out, and renter’s insurance covers personal belongings, which are your responsibility.

Most renter’s insurance policies will cover a range of personal belongings, like: jewelry, clothing, devices, appliances, and furniture. These belongings are covered in the event of many common problems, such as:

* Theft

* Fire

* Smoke

* Falling Objects

* Vandalism

The polices also cover your personal belongings in the event of other problems that are slightly less likely to occur, but that are still a possibility:

* Explosions

* Aircraft Damage

* Volcanic Eruptions

* Riots

* Vehicle Damage

For comprehensive coverage, on top of renter’s insurance, you’ll also need to take out flood insurance and earthquake insurance, as the standard policies normally won’t cover your belongings in the event of either a flood or earthquake. However, renter’s insurance will cover you in the event of an accident in your home, such as somebody tripping over a rug and injuring themselves or getting bitten by a dog on your property.

You’ll be covered for liability damages up to a certain amount, depending on your policy. Most policies also provide living expense cover in the event of a problem that renders your rented property uninhabitable. On the surface, renter’s insurance seems like a no-brainer, but there are issues with the cover provided that have given many renters reason to doubt whether renter’s insurance is right for them.

The Current Value of Your Assets May Not Cover Replacement
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One of problem with renter’s insurance is with actual cash value policies, which many renter’s insurance policies have over the alternative of a replacement cost value policy. This means that if something happens to damage your belongings, you’re only covered for the current value of the particular item, not the amount of money that you purchased it for.

If your three-year-old television gets stolen, then you won’t be reimbursed for the money that you paid for the television, but the current value of it. The same policy applies to furniture and other household items, which means that you may not be reimbursed enough to actually replace everything that you owned.

Limits Are in Place to Cap Your Claims

Not only is there the possibility that you’ll not be able to replace your damaged or stolen items with an actual cash value policy, but you may not even get the entirety of the item’s value unless you pay more for extra coverage. Many renter’s insurance polices have caps in place to limit the amount of money that you’re able to claim for within a set category of items or as a single item. This means that if a certain value of furniture is stolen, you may reach your cap before the full value is reimbursed. It could also mean that you only get a small fraction of the value of high-value items, like jewelry.

Confusion Over Home Renter’s Insurance

As with most types of insurance, one of the biggest concerns with renter’s insurance is confusion. Understanding what you’re covered for, what belongings can be covered, what additional expenses will be paid, and where the limit on the insurance caps out, can be tricky to understand.

You may find that you pay renter’s insurance for a number of years, only for a problem to occur and learn that you’re not as well covered as you thought you were. In these cases, if you don’t have a rainy-day fund put away, you could find that you’re in financial trouble and are unable to replace the belongings that you rely on every day. The issue is, there isn’t an alternative to renter’s insurance, it’s the only way to cover your belongings if something bad happens. However, it’s not the only way to protect your belongings.

Renter’s Insurance Doesn’t Stop Problems From Happening

Perhaps the biggest situation where renter’s insurance simply doesn’t cut it, is in the prevention of problems that can lead to your belongings getting damaged. You wouldn’t leave your car outside with flimsy locks and thin windows, and reconcile yourself that it doesn’t matter if the car gets stolen because you’re covered, so why should you do the same for your home?

Renter’s insurance can provide a safety net, to some degree, if your home gets broken into or a fire breaks out, but you can put measures in place before then to lower the risk of the events happening. Unlike renter’s insurance, which may only pay out a fraction of the value of your belongings, protecting your belongings more securely, improves your chances of keeping 100% of the value.

Securing Your Home

One of the largest threats to personal belongings is theft. A break-in can leave you to deal with the stressful and scary situation of having to replace all your belongings, the expensive ones and those with a personal value that you can’t easily put a financial value on. A childhood teddy bear or photographs may be worth a million dollars to you, but to a renter’s insurance policy, they’re not worth anything.

This is why protecting your rented property first and foremost is of a great importance. If you keep your home safe, then your reliance on renter’s insurance won’t be anywhere near as high. It’s also quite easy to protect your home with Goldy Locks – Alarm One Security Systems in Chicago, including:

Providing peace of mind about your home security.     

Investing in home security measures, and additional measures to keep your home safer from other threats, like fire and smoke damage, is a proactive and beneficial step to take. When it comes to preventing the worst from happening, renter’s insurance simply doesn’t cut it.

While renter’s insurance can give you a helping hand if you find yourself in a situation where your personal belongings have been stolen or damaged, it doesn’t provide you with any protection against problems happening in the first place. Instead of relying 100% on renter’s insurance to keep your belongings safe, make sure that you put the measures in place to reduce the risk that your renter’s insurance will ever be needed.

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