If you rent an apartment or home, your possessions are not protected by the landlord's property insurance. Landlords buy insurance for their property, not yours. Renters insurance is the answer to this problem because it protects your belongings.
Types of Renters Policies
Renters insurance policies can include three types of coverage. Personal property insurance pays for property losses. Personal liability insurance protects you if you are legally responsible for damage to the property or someone is injured. Loss of use insurance pays lodging expenses if you can't stay in your apartment.
Coverage and Benefits
Insuring your belongings is likely the first thing you think of when considering insurance as a renter. You can buy a policy covering all of your possessions or limit coverage to specific items like computers, televisions, furniture and jewelry. Policies generally insure against theft and burglary as well as losses stemming from events like floods, fires and windstorms.
Don't overlook the importance of the other types of insurance a policy can provide. Suppose a guest is hurt while visiting you, or you accidentally damage the apartment. Personal liability insurance shields you from loss by paying such claims. Loss of use coverage pays expenses such as hotel rooms and meals if you cant stay in the apartment because of a flood, fire or other problem.
Nuts and Bolts: How Policies Work
Insurance companies determine how much to pay on a claim based on either actual cash value or replacement cost. Coverage for cash value is usually less expensive. However, if you want the insurer to pay the full cost of replacing an item instead, be sure this is written into the policy. Another thing to remember is that insurers set limits on claim amounts, and they charge more if you want more protection. It's a good idea to create an inventory of your insured belongings and keep purchase records. Use this inventory to figure out how much coverage you need. An inventory may also speed up processing a claim.