Apartment renters insurance: How renters insurance works – Part 1

Renters often think that because the landlord has insurance on the home or apartment building, the possessions they have in the apartment are covered under this insurance. Many find out too late that this is not the case when some accident occurs and they lose everything. When you are renting, ask yourself if you have the finances needed to replace everything you have if the apartment is a complete loss.

Renters insurance offers the same type of coverage on personal possessions as that of homeowners’ insurance. If your apartment is broken into and some of your possessions are stolen, then the policy will cover the cost. The same thing applies if you have a fire in your apartment or if you incur a loss due to broken water pipes or a sewer problem. The damages to the apartment itself and the property will be covered under the landlord’s insurance and your renter’s insurance will take care of your personal property. You also need to have separate flood insurance as a separate clause in your policy.

Along with coverage for your personal property you also have liability coverage under renters insurance. This means that if a person is injured while in your apartment or when leaving, you could be sued for damages. With liability coverage, your insurance policy will pay for the medical expenses and if the case goes to court, the insurance company will also pay the judgement awarded by the court. Without such insurance in place, it would mean financial disaster for you and your future.

The cost of premiums for renters insurance is considerably less than that of homeowner’s insurance. When choosing a policy, you should always opt for replacement cost in the coverage of your personal possessions. Even though this is a little more expensive it will pay off in the end if you do need to make a claim to the insurance policy you will get enough money to replace what you have lost. This is because replacement cost means that you will get the current value of the possessions and what you paid for them when they were first purchased will not matter.

When there are several roommates in an apartment, each person does not need to have his/her own renters insurance. You should check with the insurance company about this, but it is best if all roommates are listed on one policy. This may pose a problem though if the living arrangements are temporary.

There are limits listed in a renters insurance policy as to how much money will be paid in case of a claim. Read over these limits carefully to make sure that you do have enough coverage and ask that it be raised, but you may have to pay extra for this. For example, if your policy allows for $2000 for the theft of firearms and the firearms that you own are worth more than this, you will need to have additional coverage.

The policy you have in place for renting covers you for the term of the policy, which is usually a year, no matter where you are. You can be on vacation for most of the year and still have coverage in place on your apartment.