Many renters are not aware that their landlord's policy leaves tens of thousands of dollars of their personal belongings unprotected. In fact, the average renter has $20,000 of personal items that would not be included under a landlord's policy. The landowners's policy also does not offer you any liability protection in the event someone is injured in your apartment or if you cause property damage. Like homeowners insurance, the main purpose of renters insurance is to shelter the policyholder's personal belongings against vandalism or theft. These plans also usually looks after your personal property such as stereos, CDs, DVDs, cameras, appliances (that don't come with the apartment), furniture, silverware, clothing and books. You are usually sheltered against wreckage that stems from theft, water damage, smoke, and fire.
In the insurance industry, the typical renters policy is known as "HO-4" coverage. This type of plan will shelter you from 17 different perils, including:
Every basic renters policy will come with two main protections: physical damage and liability coverage. The physical damage component of the plan will pay out benefits if the belongings you store in your rental are lost or wrecked. For instance, if your computer equipment were stolen from your apartment, the physical damage portion of your policy would reimburse you. Secondly, renters policies offer liability coverage. This portion of the plan will pay for your legal defense and any judgments against you if you are sued for an accident or injury that occurred on your property. Additionally, the following options are typically included in a standard plan:
A common objection given to the purchase of rental insurance is that the landowners's policy already safeguards everything. This is actually untrue. The property owners's plan strictly protects the structure of the apartment building and nothing else. In fact, some policies don't even go that far if a tenant is responsible for causing the situation. In other words, if you leave your bathtub water running and do water damage to your apartment and the one below, you might be liable.
Some renters justify going without rental insurance because they rationalize that they don't really have anything that is valuable enough to warrant safeguarding. But did you know that the average renter has almost $30,000 of personal belongings that are not insured by the landlord's policy? Could you afford to pay $30,000 to replace your possessions? More than likely, the answer is no. Aside from your regular possessions, if you have especially valuable items, like jewelry, collections, furs, etc., you should also consider a rider on your plan. A rider allows you to bolster your protection for certain items of extraordinary value.
Before you get quotes, you should try to estimate the value of your personal belongings by taking a room-by-room inventory. This will help you get an idea of how much protection you need, and provide you with documentation of the value of your items.