Renters insurance covers a lot of things, but what does renters insurance NOT cover?
Your upstairs neighbors are noisy. They park in your parking spot. They let their dog bark. But now they're on vacation for two weeks. Your apartment is going to be the oasis you've dreamed of—at least while they're gone. That's when you get the call from your landlord.
When your neighbors left for vacation this morning, they left the stove on. Needless to say, that doesn't usually end well. Your apartment fared better than theirs, but you still have a lot of smoke and water damage, and it may be some time before you can stay there. Even though the fire department put out the fire quickly, your refrigerator full of groceries, your clothes, and your book collection are a loss. Fortunately, you had the foresight to get renters insurance. You just aren't quite sure what renters insurance does and doesn't cover.
What Does Renters Insurance Cover?
Renters insurance is a low-cost way to ensure you don't lose everything even when disaster strikes. Policies vary, but at its most basic, renters insurance will help you replace items lost due to burglary, vandalism, or fire.
It's more than just that, though. Depending on your policy, renters insurance may cover your belongings in a storage facility or items stolen from your car.
People are often surprised to find out that renters insurance also covers the food in their refrigerator in the event of a power outage or other disaster.
Why Do You Need Renters Insurance?
It's easy to believe you don't need renters insurance. Maybe you try to live simply and don't have many belongings. Perhaps you're subletting a place for three months and don't think it's worth the trouble. Those are perfectly good reasons to skip renters insurance—until you need it.
You may not have many belongings, but you'd be amazed by how quickly things can add up if you had to replace everything. Even the most basic items like a bed, a lamp, a few pots and pans, a chair, and a few changes of clothes can easily cost hundreds of dollars. A stolen bike or computer could be a few hundred dollars alone.
For that matter, if your apartment is damaged and you need to stay somewhere else while it's being repaired, most insurance policies will cover your housing expenses. And, no, your landlord's property insurance won't cover that or any of your other losses. Their insurance will cover the damages to the property but not your belongings or expenses.
What Does Renters Insurance Not Cover?
While renters insurance does cover a lot, it won't cover everything. Here are the most common exclusions in a policy:
1. Flood damage
Just like homeowners insurance, renters insurance policies rarely cover flood damage. You can, however, get a separate flood insurance policy through the National Flood Insurance Program. Water damage from a burst pipe or another water leak may be covered, however.
Most renters insurance policies have a limit on how much they will cover. Expensive or large collections of jewelry may only be covered to a certain amount.
3. Electronic equipment
Just like with jewelry, there is generally a limit on how much electronic equipment an insurance policy will cover. If you have multiple televisions, computers, or an expensive stereo system, you may want to explore adding an enhancement to your policy.
4. Damage due to negligence
We know dunking your television in the pool to find out if it's waterproof seemed like a good idea at the time. Unfortunately, a renters insurance policy probably won't cover that damage.
5. Bug infestations
Renters insurance policies usually do not cover bug infestations of any kind.
6. Your roommate's stuff
Your policy may cover family members if they're named on the insurance policy, but an unrelated roommate will have to get insurance on their own.
How Much Coverage Do You Need?
Every situation is different. If you have large or expensive collections, you'll want more coverage. According to Money Crashers, the "average" renters insurance policy covers $30,000 in property and $100,000 in liability.
There are two types of coverage to consider, though: Actual Value coverage and Replacement Cost coverage.
- Actual Value coverage covers the current value of your property. So an old couch may have a value of $50, even if you bought it new for $1,200.
- Replacement Cost coverage covers the expense to replace an item lost through theft or another disaster. Rather than the market value of your couch, for instance, you would be covered for the cost of a new one.
The cost of a policy hinges on what type of coverage you choose. Additionally, higher deductibles will lower your premium, although you may feel it's better to opt for higher premiums and a low deductible. For most people, though, renters insurance may cost less each month than it takes to fill up your gas tank.
Contact your Pekin Insurance agent today, and we can work together to find the right policy for your needs.