Why do I need Renters Insurance?

Renter's insurance has recently become more and more of a necessity as so many American's are forced out of home ownership due to foreclosure and become renters. Many people find themselves asking the questions, "What does renter's insurance cover? From jewelry to electronics, renter's insurance covers hundreds of thousands of different items and the right renter's insurance policy can cover basically anything in your home.

A common misconception among individuals renting an apartment or a home, is that during an emergency their landlord's insurance will cover their belongs. The truth is that a landlord's insurance will only cover the building and possibly appliances that they have provided you with. Renter's insurance is a fairly low cost plan that will help cover the loss of your valuables during an emergency.

When you are deciding on which type of policies to acquire, you should take into consideration where you live and the weather conditions you may be faced with. Many rental insurance policies do not cover damage from floodwaters. If you live in an area that is prone to flooding, you should  purchase flood insurance. 

Generally, insurance will cover damages to items that resulted due to electrical problems, smoke, theft, wind, snow, or hail.

You may also want to research whether your insurance company will offer replacement cost coverage or actual cash value. Replacement coverage will pay out exactly what is costs to have your item replaced. Actual cash value will ensure that you will get back what your item is worth. Although it is better than no insurance, actual cash value will only pay for what the item was worth at the time of the incident.

To properly ensure that you purchased enough insurance to cover all of your personal belongs, you should take an accurate inventory count of your items. It is recommend that you make a detailed list of your items in addition to taking photographs of the items located in your house.

Your rental insurance may have a limit of the available coverage, which determines the amount of money you will receive in a disaster. That is why it is important to properly account for all of your items.

Keep in mind that if you have a roommate, that is an unrelated individual, it is recommend that you each purchase your own renter's insurance. Although you live in the same household, their insurance will only cover their items and visa versa.

As with most insurance policies, you are required to pay a deducible.

Does Renter's Insurance Cover Jewelry? When it comes to jewelry, many renter's insurance policies have a limitation as to the amount that can be covered for jewelry. If you have a large or substantially worthy collection of jewelry then you need to make sure that the renter's insurance policy that you purchase will actually cover the amount that your jewelry is worth. You can always pay for additional coverage on a policy if you find that your renter's insurance does not adequately cover the value of your jewelry.

Does Renter's Insurance Cover Cash on Hand? If you have a large amount of cash on hand it is suggested that you get a bank account where your money will be safer kept. Renter's insurance will typically only cover amounts of cash under $500 and usually more like $250!

Does Renter's Insurance Cover Liabilities at Home? You should purchase additional liability insurance with your renter's insurance policy. Your renter's insurance policy will usually have the option of liability coverage which will cover the cost that you would otherwise incur if somebody were to get hurt on your property. It is recommended that anybody renting a home or apartment get additional liability insurance on their renter's insurance policy to keep from having their assets taken in a lawsuit in the event that somebody gets hurt and sues you!

Please note:
The above is meant as general information and as general policy descriptions to help you understand the different types of coverages. These descriptions do not refer to any specific contract of insurance and they do not modify any definitions expressly stated in any contracts of insurance. We encourage you to speak to your insurance representative and to read your policy contract to fully understand your coverages.