Renters Insurance Buying Guide
Most people know that if you own a home, then you should have homeowners insurance.
But what if you do not own? What if you merely rent? Do you still need insurance coverage?
Most experts’ answer this question with a resounding “Yes!”
Why Renters Insurance is Important
What renters might not know is the coverage provided by homeowners insurance protects a lot more than just the physical structure of the home.
Homeowners insurance, which works in a similar fashion as renters insurance, also protects the policyholder’s property within the home.
Renters might assume that just because the property’s owner carries insurance, then the renter’s personal belongings are protected if a disaster, such as a fire, occurs. This assumption, however, is not the case.
Without renters insurance, the renter will not receive compensation for any personal items that are lost or damaged in a property-related disaster.
Take just a moment to itemize your personal belongings in your head. You probably own some furniture, books, CDs, DVDs, electronics and maybe even some artwork. You more than likely also own a computer, and don’t forget your clothing.
The costs of all of these items can really add up. Now, imagine that they are destroyed or stolen. Without renters insurance, you would be out of luck.
In addition to protecting your personal possessions, renters insurance protects you in the form of liability insurance.
Liability insurance offers the policyholder legal protection if the policyholder, a member of the policyholder’s family or even the policyholder’s pet causes injury or property damage to another person. This protection also extends to situations in which a person injures him or herself while at the policyholder’s home.
If a visitor trips on your area rug and sprains his or her ankle, you would be on the hook for any medical expenses resulting from the injury. Renters insurance, however, would help you by covering these costs.
Types of Disasters Covered by Renters Insurance
When it comes to homeowners insurance, there are six essential policies available. The policy made available to renters is referred to as an HO-4 policy.
An HO-4 policy covers damages resulting from 16 types of disasters, or perils, as defined by the insurance industry:
- Damage caused by fire or lightening;
- Damage caused by windstorm or hail (includes tornadoes and hurricanes) ;
- Damage caused by explosion;
- Damage caused by riot or civil commotion;
- Damage caused by aircraft;
- Damage caused by vehicles;
- Damage caused by smoke;
- Damage caused by vandalism or malicious mischief;
- Theft of personal property;
- Damage caused by volcanic eruption;
- Damage caused by falling objects;
- Damage caused by the weight of ice, snow or sleet;
- Damage caused by sudden and accidental discharge or overflow of water or steam from a household appliance or from within a plumbing, heating, air conditioning or automatic fire-protective sprinkler system;
- Damage caused by sudden and accidental tearing apart, cracking, burning or bulging of a steam or hot-water heating, air conditioning or automatic fire-protective system;
- Freezing of a household appliance or of a plumbing, heating, air conditioning or automatic fire-protective sprinkler system; and
- Sudden and accidental damage resulting from an electrical current that is artificially generated.
Events that are not covered by most renters insurance include floods, earthquakes, wars, nuclear accidents, landslides, mudslide and sinkholes.
Renters insurance also does not cover damages that result from neglect or misuse on the part of the policyholder.