Do you rent your home or
apartment? While your landlord's homeowner's insurance will cover the
building, it won't cover your personal property. This is an important
insurance to have because theft, damage, or destruction of personal
property can happen anytime. Some wiser property managers include
renters insurance in the rent bill while others require you to provide
proof before you can sign a lease.
There are basically two kinds of risk levels involved when purchasing
renters insurance. The most common type protects property from
incidents like fire and theft. The more comprehensive version, also
known as a "full-risk" policy, will cover more than just that, such as
floods or other unforeseen events.
Most policies have a deductible that must be met. For example, if your
coverage is $25,000, then you might have to pay 1% that costs you $250.
This may not be worthwhile if you own less than a couple thousands in
possessions. You must remember that property depreciates in value.
Renters Insurance covers personal property, personal liability and loss
of use. One thing most people don't know is that renters insurance will
also pay for travel risks. In the event your personal possessions are
damaged in travel or lost, such as luggage, it will cover those
expenses up to a certain percentage of your policy. Typically it's
about 10% of your coverage limit. So if you have a $25,000 policy, your
travel coverage would be $2,500.
Just like auto insurance will pay for a rental car when your vehicle is
not usable or being repaired or replaced, rental insurance will pay for
food and housing when you can't stay in your apartment. This would, for
example, cover hotel and restaurant bills in the event your apartment
catches on fire.
The personal liability feature of renter's insurance would cover you if
someone was hurt in your home including lawsuit expenses and judgments.
College students may or may not need renters insurance depending on
their age, status of dependents and the policies of their parents
homeowner insurance.
Some top of the line insurance policies will actually pay for the replacement cost of your items.
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