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The Basics of Renter's Insurance

If you're planning on renting a property, you can't take a lot of risks. While your landlord may be nice enough to replace any faulty pipes or repair cracks in the wall, you may be at risk of greater damage.

Unfortunately, if your rented property catches fire, the landlord will not cover the expenses of your belongings. Furthermore, natural disasters and theft are more factors you will need to consider when planning to rent a property.

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Hence, you'll need to opt for renters insurance. However, with the number of plans on the market, picking the right insurer for your needs may be tricky. Hence, you're going to have to familiarize yourself with the basics of renters insurance to make the right decisions.

What is Renters Insurance?

Many renters believe that their landlord’s insurance policies will cover the damages to their property. In most cases, that isn’t true since the landlord will usually insure his property, not your belongings.

Renters insurance covers any unexpected damages to your belongings in a rented property. Whether it’s a natural disaster, fire, or theft, you’ll need to ensure you keep your belongings safe. In the case your belongings are damaged, you will be compensated for your damaged or lost possessions.

However, some renters' insurance plans may go beyond protecting your belongings, depending on your coverage. Some plans cover any liabilities if someone is injured on your property. Lastly, while this plan may sound similar to homeowners insurance, renters insurance does not cover any damages to the structure of the property.

How do you get compensated with renters insurance?

In the unfortunate case that your belongings are damaged in a rented property, renters insurance will compensate you for any losses. However, the compensation amount varies depending on the loss type and the damage scale. Furthermore, it may also depend on the amount of coverage you've opted for in your plan.

Renters' insurance payouts work similarly to regular insurance. You'll have to file a claim for the lost or damaged belongings, and then the company will review your losses to ensure they fall under your plan's coverage. Once your claim has been approved, the insurance company will pay you depending on the plan you’ve selected.

When you're picking a renters insurance plan, you'll have two coverage options to choose from. An actual cash value coverage plan reimburses the value of the belongings that you've damaged or lost on your rented property. On the other hand, the replacement cost coverage plan will cover any costs to replace the items that have been damaged or stolen.

What does Renters Insurance Cover?

Before signing up for a renters insurance policy, you'll need to work out the type of coverage you need. Each insurance plan has its coverage policies, which means the coverage may include medical payments and living expenses.

Here is a list of some things a renters insurance policy may cover.

#1 Personal Property

When you think of renters' property insurance, you probably think of this. Renters insurance will cover all the stuff you've held in your rented property. This includes furniture, electronics, cutlery, and kitchen equipment. It could also include decorative items you've placed around your house.

Here are some of the causes insurance companies will look at when considering your claims for damaged or lost property.

  • Explosions
  • Theft
  • Natural Disasters, including cyclones, volcanic eruptions, floods
  • Lightning
  • Freezing
  • Riots
  • Smoke
  • Vandalism
  • Overflow of water from burst pipes

Before picking an insurance plan, carefully assess the number of coverage limits you need depending on the property you are insuring. If your rented property is in a dangerous area and at risk of vandalism and theft, you'll want to increase your coverage limit so the insurance company can pay you the right amount for any damages to your property.

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#2 Medical Bills

Most renters' insurance plans will cover small medical payments to others who visit your property if they get injured. For instance, if you have a guest over and they were to take a light tumble, renters insurance could cover the cost of bandaging and the visit to the ER.

#3 Personal Liability Coverage

Renters insurance will also cover any damage to another property caused by you. For instance, if you accidentally damage your neighbor's property, renters insurance may help you cover a fraction of the damages. Furthermore, it will also cover any costs if you're sued for any incident covered in your insurance policy.

#4 Additional Living Expenses Coverage

Lastly, renters insurance will also cover hotel bills and other costs if you’re unable to live in your rented property. For instance, if your apartment is damaged in a fire and the repairs are expected to take a long, your insurance will cover the hotel bills and meals, which is also called loss of use.

Frequently Asked Questions

Does renters insurance cover theft?

Yes, most renters' insurance plans will cover theft as it falls under personal property coverage. You will be able to claim the value of any products that have been stolen from your rented property.

Does renters insurance cover water damage?

Yes, depending on your package, you can cover water damage as part of your renters' insurance plan. In most cases, water damages caused by a burst pipe or leakage will be covered by renters insurance. However, some policies don't cover natural disasters like floods; hence you'll need to dive deeper into your policy.

Does renters insurance cover car theft?

No, renters insurance will not cover vehicle damage or car theft. Damages caused to your vehicles are covered by vehicle insurance; however, renters insurance may cover any personal belongings that were in the vehicle when it was stolen.

Final Thoughts

When you're staying in a rented property, renters insurance is essential to safeguarding your belongings in case of damage, loss, or theft. Before you sign up for a renters insurance policy, look at plans from multiple insurance companies to ensure you're getting a good deal.

Lastly, if you have a hard time picking a plan, contact The Platinum Group today! Call us at 909.466.7876 or visit our office at Rancho Cucamonga.

Also, to learn more about Personal Insurance read our article: "Life Events that Affect Your Insurance Needs".