If you are about to rent a new home or are already living in a rented space, renters insurance is something to seriously consider investing in. While renter’s insurance plans are not nearly as popular as homeowner’s insurance plans, they offer similar benefits when it comes to the protection of your personal possessions. Understanding how renter’s insurance works is the first step to deciding if it is right for you.
There are multiple types of rental insurance plans and coverage levels available to renters by most insurance providers, with the average cost of most plans coming to less than $20 a month.
Individuals interested in renter’s insurance policies can choose from a variety of coverage limits and deductible amounts to toggle between different possible annual and monthly premium rates. Even more, renter’s insurance policyholders can choose between plans that pay the current value or the replacement cost of insured items, another feature that can significantly affect the overall cost of a policy.
Before you decide if you can benefit from renter’s insurance, it is a good idea to become familiar with what most renter does insurance policies do and do not cover. The majority of the average person’s personal items can receive coverage under a basic renter’s insurance policy, but multiple exceptions to items like expensive jewelry or computer equipment do apply.
In addition, most insurance providers allow their policies to be used only when personal belongings have been damaged or destroyed in qualifying conditions.
Make sure to note what sorts of situations are not included in the plan you are considering, such as coverage for flooding or negligent behavior. Once you decide you would like to invest in a renter’s insurance policy, you may want to consider renter’s insurance appraisal before you need to cash in on your policy to avoid any conflicts between you and your insurance provider later on down the line.
Many special groups can specifically benefit from renter’s insurance policies, such as college students moving into off-campus housing. Regardless of what sort of renter’s insurance plan you are looking for, there are multiple ways to cut back on the annual and monthly premiums to make the policy as affordable as possible. Keep reading to learn much more about renter’s insurance policies and choosing the right plan for you.
What is renter’s insurance?
Renter’s insurance policies, also known as HO4 or HO-4 insurance policies usually provide coverage for most types of personal possessions not listed in its exclusions list. Said personal belongings, however, must have been lost or damaged in a qualifying disaster.
Most insurance providers recognize 16 different situations that qualify you to receive a payout from your renter’s insurance policy, from theft and vandalism to fire and volcanic eruptions. If your personal possessions were lost or damaged in a flood or any other non-insured situation, your renter’s insurance policy will not provide you with coverage.
Renter’s insurance policies also often come with personal liability coverage and additional living expenses (ALE) coverage.
Personal liability coverage kicks in to pay your legal fees if someone who is accidentally hurt on your property sues you. Including personal liability coverage up to tens of thousands of dollars often only adds a few dollars to the monthly premium of most renter’s insurance plans.
Many renter’s insurance plans also include ALE coverage, used to provide living costs to the policyholder if he or she is ever temporarily unable to live in their primary rented space. Interested renters can start shopping for renter’s insurance plans by contacting their current provider of other types of insurance or by doing an online search to see what sort of renter’s insurance plans are available in your area.
What does renter’s insurance cover?
Renter’s insurance plans are so incredibly useful because they can provide coverage for most of your personal possessions up to the policy limit. Furniture, clothing, electronics, appliances, reasonably priced jewelry and much more are often automatically protected under a typical renter’s insurance policy.
Many renter’s insurance providers offer plans with coverage levels starting out as low as $2,500 and typically rising into the hundreds of thousands of dollars when requested. The majority of renter’s insurance plans provide coverage for personal possessions if they were damaged or lost due to insured disasters.
Damage from natural phenomena like wind or lightening is included in most renter’s insurance policies, for example, in addition to damage or loss caused by theft or rioting.
Policyholders of renter’s insurance policies can invoke their coverage if damage occurs to their personal possessions in their home, vehicle or other property or in general with the policyholder. Renter’s insurance plans with personal liability coverage will also allow policyholders to have coverage for damage or loss that they accidentally cause of other people’s personal property. When damage or loss of personal belongings occurs, the policyholder is required to submit a claim for reimbursement, which will clearly reflect if their payout is based on a current value or replacement cost model.
What does renter’s insurance not cover?
Some situations can cause damage or destruction to your personal possessions that are explicitly excluded from coverage in most renter’s insurance plans. Negligence or criminal behavior on the part of the policyholder is usually a clearly stated reason that the insurance provider may deny a claim submitted for reimbursement. Damage or loss of personal property due to some natural events like earthquakes and floods are also out of the purview of the average renter’s insurance policy.
Along the same lines, not every category of personal belongings is covered under renter’s insurance policies. Some items can be covered, but only up to a certain limit for that category of item. High value items like expensive jewelry or electronic systems should be added as a separate rider to the general policy to ensure that they are fully covered and that they do not monopolize all of your coverage amount if a complete disaster were to strike. The specific renter’s insurance plan you are considering may have its own list of excluded situations or items, so look closely at coverage details before completing your purchase.
Renter’s Insurance Appraisal
Renter’s insurance appraisals are used to help policyholders and insurance providers come to an agreement about the value of certain personal possessions. Renter’s insurance appraisals can occur before the official policy purchase so that you have a good estimate of how much coverage to purchase. In these situations, it is common for the policyholder to submit a list of their most prized possessions for appraisal if they expect coverage under the renter’s insurance policy. If you already have a renter’s insurance policy, and have filed a claim for reimbursement for an insured personal possession, you or the insurance provider may request a renter’s insurance appraisal to decide upon the payout amount for a submitted claim.
Most renter’s insurance appraisals occur by forming a panel with at least three parties: one representative for the insurer, one for the insured and one mediator. This panel is tasked with discussing whatever evidence has been gathered in support of the proposed payout amounts from both parties and of coming to a conclusion that is just for everyone. If either party is unsatisfied with the outcome of the panel, he or she can appeal the appraisal and request further discussion.
Should college students obtain renter’s insurance?
Many college students benefit from obtaining renter’s insurance when they live off campus in independent housing. In other on campus situations, a parent’s homeowner insurance policy or a dorm insurance policy is usually more appropriate. Some insurance providers offer special renter’s insurance policies for college students that include extra protections or coverage limits, but oftentimes a typical renter’s insurance policy will cover all of the needs of the average college student.
Renter’s insurance plans for college students generally cover the same situations as other types of renter’s insurance plans. Most important to this group tends to be coverage for theft and vandalism or damage from the elements like wind, hail or snow. Any particularly costly personal possessions should be added as riders to the basic renter’s insurance policy as well.
How to Lower the Cost of Your Renter’s Insurance
While the average renter’s insurance plan costs policyholders less than $200 a year, sometimes finding an even more affordable option is necessary if you are going to purchase a plan. In this case, there are several ways you can lower this price even further. To begin, you can choose a plan with a higher deductible and a lower premium to cut down on your guaranteed costs. You can look into shaving down the coverage limit or the policy extras as well. If you are in the mood for some home improvement, updating your home’s fire safety system or installing a personal security system will most likely decrease your renter’s insurance cost even more. When looking for an affordable renter’s insurance policy, make sure not to sacrifice too many benefits for small savings.
By Melanie Henson –