You may be one of the 37.1 million households that rents a home or apartment in the U.S. If so, your landlord or rental company may require you to carry a renters insurance policy as a requirement for your tenancy. Many renters are unsure of the need for coverage, assuming the homeowner carries the necessary coverage. However, this assumption is incorrect. Without renters insurance coverage tenants can be left with nothing and no place to go should a disaster strike.
What does the homeowners insurance cover?
Homeowners insurance covers only damage to the building. In a traditional homeowners policy, the personal possessions of the homeowner are covered. However, when a home is a rental property, none of the personal possessions of tenants are covered. If a fire damages the home, the replacement of the structure of the home or apartment you’re renting will be covered by the homeowners insurance policy.
What does renters insurance cover?
Renters insurance provides three types of financial protection for tenants:
- Coverage for Personal Property
- Additional Living Expenses (ALE)
Each of these are covered under the usual covered disasters of home insurance policies such as fire, smoke, lightning, vandalism, theft, explosion, windstorm and certain types of water damage. You should double check your coverage to confirm the named perils as they can vary from policy to policy. Floods are not covered by regular renters insurance policies. Flood insurance is offered separately through the federal National Flood Insurance Program (NFIP).
Renters insurance provides coverage to replace or repair your personal possessions when damaged or lost. You can choose coverage either as actual cash value or as replacement cost coverage. Actual cash value is generally less expensive monthly, but includes a deduction for depreciation. Replacement cost coverage will cost more per month, but will provide enough money to replace your possessions if they are completely destroyed.
When shopping for renters insurance quotes, it is a good idea to create a home inventory to determine the amount and type of coverage you will need. This is a detailed list of all of your possessions and their estimated value. Maintaining this inventory and keeping it up to date will expedite the claims filing process if you are ever struck by disaster. Keep a copy of your inventory and policy outside of your home so that it won’t be destroyed in a disaster. Some people keep a copy at work or give one to a friend or relative to keep.
Liability is insurance that protects you if you, your family or even your pets cause bodily injury or property damage to someone else. This coverage will pay court fees and court awards up to the limit of your policy. The standard liability coverage is $100,000. Many experts caution that these type of cases can be lengthy and costly and that, at minimum, liability coverage should amount to $300,000. Be sure you have enough liability coverage in your policy to protect you or you will end up paying out of pocket.
ADDITIONAL LIVING EXPENSES (ALE)
Additional Living Expenses provides coverage if the home you are renting is destroyed and you are forced to live elsewhere for a period of time. ALE will pay for hotel costs, restaurant bills or temporary rentals and other costs you may incur while displaced. This type of coverage will usually reimburse you for the total difference between your regular living expenses and your additional living expenses. Check your policy as most have a limit to the total amount that they will pay out. You’ll want to be aware of this amount as you make arrangements during this time.
Check on a renters insurance quote in Florida. They are free and easy and can help you make a more informed decision about your renters insurance policy. Visit American Integrity Insurance at http://aiicfl.com for a free, no obligation renters insurance quote in Florida.