It may seem an obvious thing. Car insurance covers your car. Homeowners insurance covers a home, and life insurance covers your life (more or less). So, one would assume that renters insurance covers the apartment you are renting. But, that’s actually not the case.

1. What does renters insurance cover?

Renters insurance covers the ‘stuff’ in your apartment. Accidents happen and stuff is expensive. So, let’s say, a pipe bursts and the leak destroys your furniture, or a thief breaks in and steals your laptop, if you have renters insurance you won’t have to pay out of pocket to replace all that stuff. You can file a claim and get reimbursed for damaged or stolen items. That’s quite a weight off your shoulders.

2. My landlord has insurance, doesn’t that cover me?

Your landlord’s homeowners insurance protects the building. It covers structural damage to the apartment itself. But your stuff is your stuff. It’s up to you to make sure it’s insured.

3. Does renters insurance cover all of my possessions?

Not exactly. This is insurance we’re talking about, and as with all insurance policies, there are coverage limits. With renters insurance, the limits come in two forms. There is an overall limit, which specifies how much money your policy will pay out in total, and there are individual limits on things that are considered very expensive (such as jewelry, collectibles, art, firearms etc.) But, you can purchase extra coverage on those items.

4. Does the policy pay full-price for the covered items?

That really depends. There are two types of renters insurance policies.

If you have an Actual Cash Value policy (ACV) the insurer agrees to pay you the depreciated value at the time of the loss. In other words, they include a deduction for depreciation. This type of settlement doesn’t allow you to replace what you have lost but rather compensates you for the value of the item as if it was being sold at a garage sale.

If you have a Replacement Cost Value (RCV) policy, your insurer provides you with a payment equal to that required to replace lost items in the loss settlement of your claim. However, keep in mind that in order to be able to collect replacement cost, you must actually replace the items.

5. Is a replacement cost value policy is better than an actual cash value policy?

A replacement cost value definitely pays out more, but it also costs more. So, you’ll need to assess the value of your things, figure out how much coverage you need and, ultimately consider the trade-off.  However, you should know, renters insurance is actually pretty cheap. In most states, a basic policy costs around $20 a month. Remember though, how much you pay is affected by how much coverage you need, which is determined by how much you own.

6. How can I determine how much my stuff is worth?

The short answer is to take an inventory of all your things. There are apps available to assist with this, like iKeepm, which makes the process much easier. People typically opt for $25,000 in personal property coverage and $300,000 in personal liability coverage with a $250 deductible.

7. Does the insurance company just accept my estimates?

As long as they’re accurate. Look up prices online and have rare or expensive items appraised. Your insurance agent will probably ask for an appraisal report on these items anyway, should you ever need to file a claim. Save receipts, log serial numbers and take plenty of pictures. A solid home inventory app can help, but, if this all sounds very daunting, but don’t worry. Guy P. Williams Insurance can help you figure out how much renters insurance you need.

8. Does renters insurance only cover my ‘stuff’?

Actually, no! Some policies also cover additional living expenses, like hotel stays and meals if you’re unable to stay at your apartment as a result of an accident like flooding, a fire, weather damage etc.
On top of that, most renters insurance policies also cover certain personal liabilities. For example, if someone has an accident at your home, your policy pays for their medical bills or your legal expenses in the event that person sues you.
Renters insurance can also cover damage that you accidentally do to someone else’s apartment. Like if you overfill your bathtub and the water leaks into the unit directly below you.

If you have any more questions regarding renters insurance. Contact Guy P. Williams Insurance today!