Do Tenants Actually Need Insurance?
What Does Renters Insurance Cover?
How Much is Renters Insurance?
What Kind of Disasters are Covered?
These are a few of the disasters that can cause loss that are covered. The policy will be specific about its coverage.
- Damage by an aircraft
- Vehicle damage
- Fire, smoke or lightning
- Riot or commotion
- Weather conditions like a windstorm, hail or weight of ice or snow
- Damage from water or steam from household appliances or HVAC
What Does the Policy Cover in Liability?
Liability is a standard item covered in renters insurance policies. If a visitor is injured in the tenant’s unit, the policy will cover court and legal expenses up to the dollar amount in the policy itself. It’ll also cover expenses if the tenant himself is injured as well as anyone else living in the home who is on the policy.
How Much is Renters Insurance if it Covers Loss of Use?
There are times when the tenant’s apartment becomes uninhabitable. If it’s one of the covered problems, the renter’s policy can reimburse for expenses if the tenant has to live elsewhere for a period of time. It might even cover replacement of food and other expenses. The policy should explain what is covered under “additional living” expenses as well as how much will be paid to the tenant. This is often part of the standard coverage, but it might require more in premiums for extended expenses to be disbursed. The insurance agent can give the tenant-specific details based on the policy chosen.
Does Rental Insurance Cover Belongings When a Tenant Travels?
When a policy covers personal belongings, those items do not have to be in the home. They can be in the tenant’s car whether they’re traveling to work or on a road trip. It can also cover the items when they’re in the tenant’s possession on a trip anywhere in the world. The coverage includes theft if they’re stolen from the hotel room in another country. It’s important that a tenant with a renter’s policy checks it before traveling to ensure they have the right coverage.
What Does Renters Insurance Cover in Replacement Costs?
When the insurance company talks about replacing a tenant’s belongings, they usually mention either replacement cost coverage or actual cash value. The replacement cost coverage, or RCC, will replace an old item with a new one. For example, it’ll replace an old television with a new one at today’s rates. The actual cash value, or ACV, will only give the tenant the reimbursement of the value of that old television. For a policy that will give the tenant the RCC of his or her items, the tenant will have to pay more.
How is Value Determined?
The tenant will have to do a home inventory before purchasing the policy. Often, people undervalue or underestimate the amount of belongings they have, so an exact accounting is vital to knowing the value of items, and how many the tenant actually has. A video accounting is one of the best ways to catalog all the items in a person’s home. It can help because the tenant can video the serial numbers on the backs of items as he travels throughout the rooms of the apartment. Video is unlikely to get lost as long as it’s stored in the cloud.
Landlords should think about requiring tenants to have a renter’s policy since coverage and premiums can be high for a landlord with multiple units. It’s hugely beneficial to the tenant to have a policy amount that will cover all their items, which isn’t the case with a landlord’s insurance policy.