Renters insurance is designed to protect your personal property and financial health. Understanding key policy provisions will eliminate surprises and assure adequate coverage for property loss and liability exposure.
Types of Expenses Covered – Personal belongings, medical expenses and liability. Protection against loss of personal property can range from $15,000 to $100,000 or higher, depending on the volume and value of your belongings. Typical property includes furniture, appliances, electronics, clothing and other personal items that are not a part of the building or property.
Liability insurance protects you against risk per individual and per accident. If a visitor trips over your rug, for example, initial medical expenses are covered within a per-person limit. Overall liability for bodily injury or property damage covers up to the policy limits you choose.
Variable Coverage Limits and Deductibles – Generally, quotes for renters insurance provide standard coverage, but you have important choices that will impact your premium. Property coverage is limited by item or category – jewelry, silver, electronics and computer systems, for example. You may opt for special endorsements, at extra cost, to cover your high-value items.
Your next choice is the method of calculating your reimbursement. Standard coverage allows for Actual Cash Value reimbursement, but you may elect to pay a higher premium for the actual replacement cost of your personal belongings. Since your property depreciates over time, the difference in replacement cost versus actual value can be significant.
Deductible amounts also impact your quote. The lower your deductible, the higher your premium, because your insurer’s risk is greater. A large deductible exposes you to a higher risk of loss. Your premium will be lower, but you will absorb up to $2,500 of your loss, per occurrence.
Liability and medical payment limits also vary. Your own financial circumstances and goals should influence your choice of coverage amounts. The high-income/net worth individual may want greater protection against loss. Your agent should assist you in determining your exposure to loss and reasonable coverage to offset that loss.
Finally, renters insurance most often are perils-based policies. Geographic location can significantly increase your exposure, as with Florida and Louisiana residents for example, who pay higher premiums for wind and storm damage than residents of many inland states. Specific coverage might include:
Fire, Smoke, Lightning, Windstorm, Hail
Explosion, Riot, Civil Commotion
Aircraft, Falling Objects, Vehicles
Theft, Burglary, Vandalism, Malicious Mischief
Sudden and Accidental Tearing Apart, Cracking, Bulging
Sudden and Accidental Damage from Artificially Generated Electrical Current
Peace of mind and protection are your primary goals, so it is important to review and understand the coverage outlined in the policy you are considering. Be certain to ask your insurance to clarify any questions you might have, so you will make the choice that best fits your financial goals.