To Serve And Protect: The Purpose Of Renter’s Insurance:

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By Mia Bolaris-Forget

So, you’ve finally unpacked all those eclectic essentials you’ve gotten for your shower or as wedding gifts and have found the perfect home for them in your apartment and new home. But, what if there’s an emergency and you’re stuff is damaged or destroyed. How will you ever repair or replace it?

If you’re counting on being covered by your landlord’s insurance policy, you better thing again. Contrary to popular belief, your landlord’s coverage accounts for his or her property but not your possession. Your belongings are your responsibility to insure.

The best way, according to experts to secure your future and your furnishings is by taking out renter’s insurance, also known as an HO4 policy.

Much like a homeowner’s policy, some landlords and leases mandate that this essential insurance is in place BEFORE you can rent.

But, what exactly are the benefits to you? According to industry professionals, renter’s insurance offers financial protection against the loss or destruction of your belongings when you rent a home or apartment. And, it covers about 17 perils, including theft losses, vandalism, fire or lightning, smoke damage, water damage, windstorm or hail, even falling objects or explosions. However, flood damage is generally NOT included, nor are earthquakes. In fact, these “disasters” require a separate policy available at an additional cost.

Renter’s insurance is essentially very similar to homeowner’s insurance in the respect that in addition to property damage, it covers liability for accidental guest injuries. Another perk is that additional living expenses are also covers under such policy. For instance, if your abode is rendered unusable due to fire, most policies will reimburse you for the added expense of living someplace else while repairs get under way, but you should note there is generally a “cap” or limitation to the amount insurance companies are allowed to pay out.

Renter’s insurance however also does not cover unpaid rent or intentional damage.

But, on the positive side, it is fairly reasonable in price and some companies offer a lower premium if you also have a car insurance policy with them.

As far as how much insurance you’ll need, it’s advisable to make a list of your possessions, and don’t forget to include items such as your wardrobe, bedding, shoes, accessories, all of it adds up.

Experts further suggest making a copy and sending it and any photographic backup to a relative or friend in another location (as proof).

Next, experts recommend adding up the cost of inventoried items helping you make the final decision with regards to how much renter’s insurance you’ll need. There are generally two types: “replacement cost” and “actual cash value”

“Replacement cost” policies off coverage just for what the name implies, covering your cost to replace your possession, with no deduction for the age of the item, so a coffeemaker bought five years ago, will warrant current price of replacement.

“Actual cost value” policies take age and depreciation into consideration, but overall is the less expensive policy and better than nothing at all.

And, it’s important to make note of “floaters”. Floaters keep specially named items safe from peril by placing special coverage on them as part of a separate insurance policy. Floaters cover items such as antiques, jewelry, etc and protect them against accidental loss or covered disaster. However, cash is rarely, if ever covered by any insurance policy.

Other costs affecting the cost of your policy may include your deductible, which usually has an inverse relationship to the price of the policy. Basically, the higher the deductible you choose, the lower the premium. However, you’ll have to take a greater loss if an accident occurs.