Renters Insurance FAQs
A: A landlord’s homeowners insurance covers all damages done to the property or the building, but it does not cover any of the renter’s property that may have been damaged. Those tenets with renters insurance can have some of their possessions replaced under their policy. There are two types of renter’s insurance that are available: 1) actual cash value, which provides reimbursement for all appliances minus the cost of depreciation, and 2) replacement cost, which pays the complete price for a replacement appliance without taking into consideration depreciation costs.
A: As a renter, whether you purchase liability insurance or not depends on the owner of the house or the landlord. Not all homeowners have insurance that covers the liability of their renters. Therefore, the burden of liability is placed on the renter’s shoulders. It is safer to assume that the homeowner will not assume liability for any damage done to the house outside of natural disasters and “acts of God.” Depending on your situation, you might purchase liability insurance for peace of mind just in case of any unforeseeable problems in the future.
A: Renters insurance offers a variety of protection to the insured. The insured can purchase liability protection, which will protect the insured in case of a lawsuit concerning property damage. Medical liability covers any accidental medical costs to any guests who may have been injured in the rented space. Some insurance even cover lost property while traveling: should an airline lose an insured’s luggage, the insurance company will reimburse the insured. There are many different plans with varying premiums, and many companies allow policy add-ons that add protection to any policy.
A: Not all insurance companies require independent policies for renters. Many insurance companies cover the rented space as a whole. In this case, the policy is under one renter’s name, and it is that renter’s responsibility to pay the monthly premium. However, because the policy would cover all the tenets in the rented space, the renters could split the monthly premium, resulting in a much lower individual payment. There are also insurance companies that require each renter to own a separate insurance policy. Of course, whether you need insurance or not also depends on your landlord and whether he or she requires tenets to purchase it.
Q: Are there ways to get lower rates with my renters insurance?
A: Insurance companies are looking at taking calculated risks, similar to that of homeowners insurance. Insurance companies look at home security: a dead bolt or security system will result in smaller premiums. Nonsmokers also decrease the chance of a fire in the rented space, so premiums will also decrease. Smoke alarms also increase the safety of a rented space and decrease the risk involved to an insurance company. Finally, a better credit rating can give you cheaper insurance. Many insurance companies will check your credit score before offering you insurance.