Few people would even think of buying a house or condo without having homeowner’s insurance. It is assumed and accepted that losses you suffer in your own house are your personal responsibility. Many people, on the other hand, rent a house or apartment and never think to buy renter’s insurance. This can be a costly mistake. Just as homeowner’s insurance can protect your personal property in a home you own, and provide liability coverage for loss or damage suffered by others on your property, renter’s insurance protects you and your possessions in property that you rent from others, and should never be neglected.
When shopping for renter’s insurance, to make sure you get full value for the money you invest, there are a few important things to look for. Read the policy carefully, and if you encounter terms or provisions which you do not understand, have the insurance agent explain them in plain English until you are satisfied with the explanation. If necessary, consult an uninvolved third party, such as an attorney, for an explanation of the policy.
Deductibles. This is the portion of loss or liability for which you are personally responsible, and which the insurance does not pay. The higher the deductible you can afford, the lower is the premium you have to pay.
Coverage and Limitations. What types of property are covered by the policy, and under what conditions and at what locations does coverage apply. Renter’s insurance generally covers your personal property anywhere in the world. Limitations are as important, if not more so, as coverage. Some companies will only assume a percentage of liability for your personal property at locations other than the ‘residence premises.’ There are also special limits on currency, jewelry, and other high-value items, or items used primarily for business purposes. Know what the limitations are before you buy a policy. Some items, such as pets, motor vehicles, or property belonging to unrelated boarders, are usually not covered at all.
Exclusions. Read the policy carefully to determine the types of perils insured against, and which types of loss are excluded, or not covered. It is especially important to know the ‘exclusions.’ The most common are acts of war, earthquake or water damage, and losses caused by neglect on the part of the insured party.
Personal liability. Know the coverage and limitations for any claim or suit against you for losses or injury suffered by others in the rental policy for which you are legally liable.
In some areas, landlords may require that you carry liability insurance coverage as a condition of the lease. Even if it is not required by the rental agreement, for your own peace of mind and financial security, having renter’s insurance is a wise course of action. Landlords will seldom assume responsibility for damage or loss of your personal property. Just as in a house that you own, safeguarding your personal property, and responsibility for injury of loss to others in the property in which you reside, is a personal responsibility.
Most insurance companies have sample policies on their websites, and it is advisable to review them carefully before committing to buying a policy. Renter’s insurance is the ounce of prevention that is truly more valuable than a pound of cure.