Feb 14, 2022
People who rent an apartment, house, or other living space may find that their landlord's insurance does not cover their personal property in the event of a loss. Renters liability insurance is designed to provide coverage in such cases. It can help ease the financial burden created when a renter loses personal belongings in a fire, theft, flood, or other disasters.
The majority of renters insurance policies include coverage for the following types of incidents: fire, lightning, theft, and other disasters. This type of policy often provides coverage for your personal property while it is in your home or apartment and when you are traveling away from home.
Higher-value items may also need to be listed on your inventory to ensure that they are covered during a loss (for instance, expensive jewelry). Some policies will provide additional living expenses if damage occurs in your rental unit and you need to live elsewhere while repairs are made.
Offering further protection, renters liability insurance can also provide you with legal expenses if you are ever taken to court over a personal injury or property damage claim that is not your fault. This type of policy does not cover injuries or damages intentionally inflicted by the insured party, nor does it provide coverage for losses incurred while committing a crime.
For instance, if someone breaks into your apartment and steals all of your belongings, this form of insurance will pay to replace them but will not help cover any court costs resulting from the thief being caught and charged with the robbery.
This type of insurance usually covers fire-related incidents in two ways: replacement cost basis and actual cash value.
Replacement cost basis usually ensures that all damaged or destroyed items will be replaced with similar things in the event of a loss, regardless of when you bought them. This can make returning items much easier when they are older and no longer in production.
Actual cash value coverage generally means that an item's depreciated value at the time of a claim may be paid out instead of replacing it with a new one. For example, if your 10-year-old television is stolen due to a renter's liability event, the actual cash value payout would only include what the TV is worth now rather than providing enough money to purchase a brand new unit.
Most renter's liability insurance policies have theft coverage included. If your personal belongings are stolen due to a renter's liability event, the costs will be covered, subject to certain limits that may be outlined in your policy. It is crucial to remember that this type of coverage usually only applies if you have an accurate inventory list on file with your insurance provider. Without one, you may not receive compensation if all of your belongings are not identified as being lost or damaged during a loss.
If you own a car and also rent an apartment or home, renters liability insurance will generally cover damage caused by collisions with other vehicles and objects (such as fences) while the car is parked and unattended; it usually does not cover damages if your vehicle is being driven at the time of an incident.
Renters insurance does not apply to every situation in a rental property. For instance, damage caused by flooding or earthquakes would not be covered under this type of insurance.
You should also know that most types of renters liability insurance only protect you while you are living in the apartment (or home) but do not help provide coverage when you are away from your rental unit for an extended period; they usually only offer protection during temporary absences due to school, business trips or vacations. If you want more permanent protection while you live somewhere other than your own home (for instance, when you travel for work and stay in a hotel), you may need to purchase a separate policy.
If any of your belongings are damaged or stolen, call the police immediately and keep receipts for any purchases needed to repair or replace lost items. This documentation will prove invaluable when filing a claim with your renter's liability insurance provider, so it is highly recommended that you always take this step if you have been the victim of theft or vandalism during an apartment fire or other type of loss. You should also file a report from the scene if there is ever a question about whether a renter's liability event has occurred. If you fail to do so, it can affect your ability to receive future claims under most renters' liability policies, even if you have taken appropriate action at the time of the event.
If you are unsure whether your renter's liability policy includes theft coverage, ask your insurance provider or agent for clarification. You should also discuss this type of coverage with your roommate(s) to ensure no confusion exists between parties during a loss situation. This can help avoid any possible complications when filing an insurance claim in the future, so it is always best to get everything out on the table before there is even a possibility that you might need to file one due to unforeseen circumstances like theft or vandalism while living in an apartment or rental home.