If you are renting an apartment or a house, your proprietor’s insurance will exclusively cover the costs of repairing the structure in an event if there is a fire or a disaster. In order to safeguard yourself and your possessions financially, you will require your own coverage generally known as tenants or renters insurance.
Renters insurance incorporates three integral types of financial protection:
• Coverage for Personal Possessions
• Liability Protection
• Additional Living Expenses
If you are seeking renter’s insurance or reviewing your insurance needs with an insurance professional, below is a checklist that can help you better choose the right coverage.
A. Coverage for Personal Belongings
1. How much insurance should I acquire?
Be certain you have adequate insurance to recover all of your personal belongings in the event of a fire, burglary or other covered disaster. The easiest way to regulate the worth of all of your personal belongings is to create a home inventory – a complete inventory of all of your possessions along with their approximate value.
2. What disasters are-and are not-covered?
Generally, renter’s insurance covers you against losses from smoke or fire, vandalism, lightning, theft, windstorm, explosion and other specific types of water damage. Such as, when the tenant upstairs leaves the water running in the bathtub and floods out your apartment, or, from a burst pipe. Most renter’s insurance policies do not cover floods or earthquakes. Flood coverage can be accessed from NFIP (National Flood Insurance Program) and a few private insurance companies. Based on where you live, you can obtain earthquake insurance as an individual policy or you can have it adjusted as an “endorsement” to your renter’s policy.
3. What is my deductible, and how does it work?
A deductible is an amount of money you must pay from your own pocket before the insurance coverage jumps in. Generally, the larger your deductible is, the lower your insurance premium will be. Note that you will be required to pay the deductible each time you file a claim, so keep this in mind when you appraise your insurance total.
4. What is a “floater” and do I need one?
If you own valuable jewelry, sports memorabilia, furs, musical instruments or collectibles, you should consider adding a floater to your policy. A floater is an individual policy that will provide additional coverage for your valuables if they are stolen or lost.
5. Will I be covered if I am away from home or traveling?
An “off premises coverage” means that possessions that are outside of your home are covered against the disasters listed in your policy. For example, a car being stolen from your home while you are away would be protected.
B. Liability Protection
1. Do I have enough liability insurance?
Renter’s insurance grants liability protection that covers you against lawsuits for any bodily injuries or estate damage done to you. This coverage pays for both the cost of defending you in court and court awards—up to the limit of your policy. Make sure the amount of liability coverage provided by your policy is sufficient to protect your assets.
2. Do I need an umbrella liability policy?
If you require a larger sum of liability protection, consider obtaining a personal umbrella liability policy. An umbrella policy jumps in when you reach the limit on the underlying liability coverage provided to you by your renter’s policy.