Is Renters Insurance really necessary when my landlord has homeowners insurance?
I'm looking to rent an apartment and the landlord is saying that I have to get Renters Insurance, but I thought I'd be covered by their insurance.
Answers | 2
Renters Insurance is a policy that insures your personal property, provides coverage to temporarily live elsewhere after a fire/insured loss and provides personal liability. This Renters Insurance policy protects you in case your “stuff” is stolen, damaged or destroyed by an insured peril. (Your home may be broken into, there might be a fire in the building or a tree could fall on the house). It also protects you in case you accidentally hurt someone and become legally liable for their medical expenses. (You could be playing ball at a cookout and accidently hit and injure someone). Earthquake coverage can be added to a renter’s policy to protect you in case the damage is caused by an earthquake. There is a separate deductible (often 5%) applied to earthquake claims. Flood damage cannot be added to a renter’s policy or homeowner’s policy but must be purchased separately if needed or wanted.
Certain items are limited in the value they are covered for unless they are appraised and insured for a specific value; some items that are limited include: money, jewelry, guns, silverware, stocks, stamp collections and furs to name a few. The items that are limited or excluded will be specified in the policy. These items often can be added to the Renters policy for an additional charge. Or, sometimes, depending on the value, a separate policy is required.
To understand what “stuff” is insured, think about loading a truck with all the stuff you own as you get ready to move. The “stuff” inside is considered your personal property. You should do an inventory and place a value on each item inside the truck. The tally of your inventory is the amount of “Coverage” you need to purchase. You want to have enough insurance to be able to go out and purchase new items to be made “whole” again. To avoid having your “stuff” depreciated at the time of a loss, you should always purchase Replacement Cost Coverage. This allows for most items to be reimbursed at today’s price, to replace your “stuff”, even if it’s 10 years old.
Your policy can be customized to add different coverage if you need it. Always seek professional advice.