When you rent an apartment or home, renters insurance helps protect you financially in the event of damage or loss of your personal property. Renters insurance also covers the liability of another individual getting hurt in your rented home as well as the loss of your home due to covered circumstances.
The elements that are covered and the extent to which they are covered will be detailed in your individual renters insurance policy. However, it’s important to understand what renters insurance covers and what each type of coverage means for you as a renter. Below, we’ll provide some further explanation on the type of coverage that most renters insurance policies offer.
Your renters insurance policy will separate personal property coverage into different categories, specifying what items are covered and what the coverage limits are for these items. The policy will explain the conditions under which losses are covered such as weather conditions, power surge explosions, and water damage. The policy will also provide details on the maximum amount that the company will pay in the loss of specific items, which is called limits of liability. Be sure to pay attention to the coverage amounts and purchase extended coverage if you will need it.
Whether it's due to a legal decision or from medical expenses that arise from an injury, liability coverage pays out when you are responsible for another individual’s injury in your home. Your policy will provide specific details of when the renters insurance company is obligated to pay. This type of coverage is meant to pay for accidental insurance such as slip-and-fall accidents or dog bites, and it will not pay out if you intend to hurt someone. The renters insurance policy will define what it deems a “reasonable” or “necessary” medical expense that it will cover.
With loss-of-use coverage, the renters insurance company may give you a payout to find alternative housing arrangements if one of the conditions covered by your policy results in your rental home becoming an uninhabitable space. The policy will provide more details on what additional protection is offered and how your living expenses are covered in the event that your home is uninhabitable. Your specific policy will also specify how long the renters insurance company will pay expenses, including any caps on coverage.
Some renters insurance companies will also offer additional coverage. This is sometimes coverage for things that are not typically associated with renting such as identity theft or check forgery. It can also include additional coverage for things like the loss of refrigerated food due to a power outage or the emergency removal of dangerous property.