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Home What is Covered by Renter's Insurance? Questions about coverage for a renters insurance policy

Questions about coverage for a renters insurance policy

In the United States, the National Multi-Housing Council (NMHC) found that 32% of households were renters. While renting a property can allow the lessee to avoid many of the hassles of owning a home, such as paying for the cost of major repairs to the structure and paying down the mortgage, there are still additional costs renters have that many do not know about or think that they can avoid.

A requisite for renters should be a renters insurance policy, but according to the Independent Insurance Agents & Brokers of America (IIABA) 64.4% of renters did not have their own insurance. These renters are putting themselves at risk for incurring high costs should an event occur which could result in the loss or damage to their personal items. If a home is burglarized, the renter without insurance will have to pay to replace his stolen television, computer, jewelry, and anything else taken, but if he carried a renters insurance policy that had a $500 deductible, he would only have to pay for the first $500 in replacement costs, and the insurance would cover the rest.

Coverage of a renters insurance policy varies based upon the terms of the insurance. The most common type is known as broad coverage. This might also be referred to as a standard policy. It will pay liability of the renter if someone is injured in his home, and it also pays for property lost or damaged due to the most common events. These typically include: fire, theft, lightening, flooding due to plumbing problems, smoke, hail, or vandalism. Damage resulting from mold, mildew, flooding from rising waters, hurricanes, or earthquakes is not covered. Some of these require separate policies. Flood insurance is only offered through the federal government's flood insurance program. Earthquake and hurricane insurance are regionally available as separate policies, but it is important to read the fine print on these policies since there is often a 30 – 90 day grace period before the policy will come into effect. Comprehensive coverage does not offer the specific flood, earthquake, or hurricane insurance, but it will cover most other incidents such as mold and mildew damage.

A homeowners policy will pay to repair the structure, but the renters insurance policy will pay to replace only the renter's personal items. Since it will not cover the building, it is a cheaper option, and the monthly premiums are lower. Depending upon what the renter owns, he might want to opt for additional coverage to raise the cap where the insurance will stop paying. This is a good idea for those who own expensive jewelry and electronics. Taking an inventory of the value of everything owned by the renter will help him to find a renters insurance policy which offers the best possible coverage.

Like homeowners, renters should also carry their own insurance with a renters insurance policy.