Renters Insurance: How it Shield From Abrupt Liability Claims

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Imagine going on vacation for a week, then returning to the house you are renting and finding that you’ve been robbed! Your TV, laptop, jewelry, and other personal property are missing, and some of your furniture is broken. Are you able to replace it all yourself? If your answer is no, you definitely need renter (or tenants) insurance.

For some, this concept is not new. But others can face it for the first time. Let’s talk about what renter insurance is, what it covers and why it’s crucial to insure property in modern conditions.

What is tenant insurance?

Renters insurance is a policy tailored to shield renters from abrupt liability claims and ensure policy-specific risk and loss absorption. It is typically classified into four categories: individual items, liability coverage, extra accommodation costs, and medical bills of other people.

The policies can be used to safeguard any living space like a mobile home or a studio. Tenants can extend their policies by including add-ons that can cover expensive pieces of clothes, accessories, and other high-priced objects.

Renters insurance is for people who rent their home or apartment from a landlord. This insurance covers the tenant’s personal belongings. It is different from homeowners insurance because the building is not covered. The landlord should have insurance that covers the structure, so that’s not the tenant’s responsibility. Some tenants mistakenly believe that the landlord’s insurance covers their belongings. This belief is not true and can cost a tenant a great deal of money.

When can renter insurance come in handy?

If there is a fire, then the landlord’s insurance will pay to replace the building, but not any personal belongings that belong to the tenant. The tenant will need renters insurance to replace their belongings if they are damaged by a flood, fire, or if they are stolen.

Personal property protection is for when the tenants’ belongings are damaged during a fire or flood. Protection also reimburses for living expenses. Insurance can cover the cost of other expenses as well, like if you must stay in a hotel while the apartment is fumigated.

Renters insurance can also help replace food if there’s a power outage and the food spoils. Liability coverage is available as well. This helps in case someone is hurt in a tenant’s apartment and decides to sue for damages. They will likely sue the tenant and not the landlord. Liability coverage will pay the injured persons medical bills if they are hurt inside the policyholder’s apartment.

By the way, if the renter’s insurance policy includes personal property coverage, it can help pay for the replacement of stolen items, even those that were outside of your rent. For example, if your personal property (such as a tablet) is stolen from your vehicle, insurance can help pay for a replacement.

What does the renter’s insurance not cover?

How to determine the amount of insurance?

So how much do you need to formalize tenant liability insurance? The easiest way to determine this amount is to create a list of all your items along with their estimated value and calculate how much it will cost to replace them. You can choose between replacement cost or actual cost coverage. The replacement cost will pay you enough to replace the item at its current full retail price, whereas the actual cost policy pays only for what the item was worth when it was damaged or destroyed. If you have extremely valuable items, it may be worth adding extra terms to your tenant insurance policy to provide super protection in the event of valuable items being lost or stolen.

Read in our blog: “Does renters insurance cover theft?”

Why does renter insurance matter?

It’s actually pretty simple – if you’re renting a home and want to protect your property, as well as avoid additional living expenses in case of emergency, any type of renter’s policy is better than no insurance at all.

Insurance is valuable because it can protect you from financial disaster. How much would it cost to replace your furniture, jewelry, and electronics? Renters insurance is a must for people who live in apartments. An accident, theft, or act of nature can occur at any time and require tenants to stand poised. Make sure you prepare for the worst.

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American REIA is all about insurance offers, helping you to discover the pros of personalized insurance coverage. By gathering data and analyzing the most affordable options and rates, we bring you a comprehensive list of quotes offered by top insurance companies.

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Date added: July 12, 2021