Renters Insurance: How does it help a tenant?
Are you staying in a rental unit? Do you know that your landlord’s insurance doesn’t cover your personal belongings? Yes, it is true. You need to have renters insurance to protect your personal belongings. Apart from providing coverage for your everyday necessities, renters insurance also protects your personal valuables like your bike, laptops or expensive jewelry. This insurance policy also covers you against any lawsuits if someone gets injured in your rental property.
Types of coverage offered by the insurance
Like homeowners insurance, the primary purpose of renters insurance is to protect the policyholder’s personal belongings against theft or any vandalism. Therefore, this insurance provides you with various types of protection in the form of different coverage that are discussed below.
- Personal property protection: This insurance protects your valuable personal possessions from vandalism, theft, etc. However, most of the companies provide you with the choice of opting for either cash value coverage or replacement coverage. You get the current value minus the depreciation if you opt for cash value coverage; if you opt for replacement coverage, then you’ll be reimbursed the present market value of the item/items.
- Personal liability protection: Typical renters insurance provides coverage for you as well as your visitors to your rental unit. Thus, this insurance pays for the medical expenses, lawsuits and legal fees if any of your guests gets injured in your rental property. Though you can increase the coverage amount according to your wish, yet you need to pay higher premiums for it.
- Fire liability coverage: You’ll also get coverage if you’re responsible for a fire that occurred in your rental property. It will cover the judgments as well as the damages that may result due to sudden occurrence of fire.
- Improvement coverage: This insurance policy protects the policyholder from any lawsuit if the rental property gets damaged. You’ll also get the coverage for the repair work that is required in order to restore the property.
Cost of purchasing renters insurance.
Though the cost of renters insurance varies from one company to another, yet there are some basic factors that determine the premium rate of your policy. The cost increases or decreases depending on the following factors.
- Type of the property – You’ll have to pay less for your premium if you live in a fire resistant building.
- Amount of insurance – It is quite obvious that you’ll have to pay more if your coverage is high.
- Location of the property – The cost of your premium will get reduced if you live in a building that has 4 or less apartments; this is due to the fact that the occurrence of fire is statistically less in these types of buildings.
Therefore, before buying a renters insurance policy, you should calculate how much coverage you need. It is highly important that you purchase adequate insurance so that you get the right coverage if needed.