Renter’s insurance is home insurance for people who don’t own a home. It is usually much less expensive than traditional home insurance, but it’s just as important. It does have different coverage, and as a renter you should understand how it works.
No Coverage for the Building
Unlike home insurance, renter’s insurance doesn’t cover the building where you live. Whether it’s an apartment or a single-family home, your landlord will need to have a property insurance policy in place to pay for damages to the dwelling.
Because the renter’s policy doesn’t cover the place where you live, it’s usually much cheaper than home insurance in Colorado Springs and other places. You can get a policy for a fraction of what you would pay if you were a homeowner.
What It Does Cover
Your renter’s insurance will include liability coverage. If someone is injured at your home, it will pay for their medical expenses. However, in some instances, your landlord’s policy may pay. It depends on where they were injured and who is responsible.
A prime example is if someone slips and falls on an icy sidewalk. If your lease stipulates that you must maintain the sidewalks, you’ll be held responsible and your insurance will cover the costs. However, if sidewalk maintenance is part of the landlord’s maintenance, their policy must pay for the expenses.
If someone is injured, it’s important that you contact your insurance provider and show them a copy of your rental agreement. They can determine who is responsible.
Coverage for Personal Items
One of the primary reasons to purchase renter’s insurance is in case of damage to your belongings. While the landlord’s property insurance will pay for repairs to the building, it will not pay to replace your personal belongings.
Your insurance policy will pay to replace furniture, electronics, clothing and other personal items. You should take inventory of what you own and make a list of how much it would cost to replace those items. This tells you how much insurance coverage you need.
If you live in a small studio apartment with only the bare essentials, you will need minimal coverage. However, if you’re renting a three-bedroom home and have a family, you’ll need more insurance.
You should make sure your insurance provides replacement value for your items rather than market value. Depreciation will reduce the worth of your items, but it will cost more to replace them. For instance, your couch may only be worth $100, but it could cost $600 to replace it.
If you have questions about how renter’s insurance works or how much coverage you need, talk to an insurance agent. They will look at your living situation and the amount of items you own, and they can help you come up with a policy that fits your budget and needs.
More landlords are requiring renter’s insurance of tenants. Even if yours doesn’t require it, you should purchase it for your own peace of mind.