If you are renting an apartment unit or a home, your apartment manager or landlord will always ask for a proof of renters insurance policy.
The specific coverage on the policy that the landlord wants to see is the liability coverage. By mandating their tenants to carry liability coverage, landlords are able to minimize risks in cases of accidents on their property.
As a renter, that same liability coverage in your renters insurance also protects you in case you were found liable for any damages to the property or injuries to others.
Renters insurance has three main components:
If you or your household family members accidentally caused bodily injury or property damage to another person, the personal liability insurance on your policy will cover the following:
Coverage For Your Pets
The financial protection afforded by your personal liability coverage also extends to injuries or damages caused by your pets including dog bites.
According to the Insurance Information Institute, there were nearly 18,000 dog bite claims in 2019 and the average payout for a dog bite claim was $44,760. Dog bite claims remain as one of the top personal liability insurance claims year after year in the United States.
Learn more about personal liability coverage.
Personal Property Coverage
Personal property coverage is included for you to cover all of your belongings, such as:
Protection Outside of Your Home
Depending on the type of renters policy you purchase, this coverage could also protect your belongings outside of your home. For instance, extra furniture stored at a storage unit or your laptop left in your car during dinner.
Coverage Limit on Valuable Items
It is important to note that most renters insurance policies place a coverage limit on valuable items, such as jewelry, fine arts, golf clubs, collectibles, etc. If there are expensive items in your possession, you should speak to your insurance agent about adding a scheduled personal property coverage.
Learn more about personal property coverage.
Additional Living Expense Coverage
Another essential coverage on your renters policy is called additional living expense, also commonly known as loss of use. Just as its name says, this coverage will take care of additional living expense in the event that your unit is not livable due to a covered peril such as fire.
Examples of covered expenses:
There is a limit to this coverage and it is specified on your policy either with a capped dollar amount limit (e.g. $10,000) or a specified time period (e.g. 12 months).
Learn more about additional living expense coverage.
Deductible (out-of-pocket expense)
Most renters policies have a minimum policy deductible requirement that starts at $250 or $500. Your insurance company may offer the deductible as high as $2,000. Lower the deductible you choose, the higher the premium will be, and vice-versa.
Keep in mind that deductible is your out-of-pocket expense after a claim is filed and before the insurance company makes any claim payout to you. For example, if your payout is $3,000 and the deductible is $500, you will receive $2,500 as the final payout amount.
Renters Insurance Cost
Most renters insurance policies average around $110 to $130 for a 12-month coverage based on the coverage limits and deductibles.
When purchased with an auto insurance, most insurance companies will offer discounts commonly referred to as "bundling" discounts. In our experience, the savings from the bundling discount can cover most of the renters insurance premium, and in some cases, even exceed the renters premium and lower the cost of the entire policy.
Renters policy is relatively inexpensive and it can provide the protection of your personal valuables while providing the peace of mind of knowing you have coverage in case of expensive liability lawsuits.