Many people who rent their home do not consider insurance, usually because they are not making an investment in real property. However, the contents of the home, in the form of furniture, appliances, clothing, family heirlooms and other movable personal belongings, often represent a substantial investment. The unprotected loss (or partial loss) of a renter’s personal property to theft, fire, windstorm or some other incident could be financially devastating.
Coverage Under the Policy
Most renter’s policies available today are closely related in design to policies created for homeowners, and combine protection against a number of perils of modern life in a single package policy. The primary difference is that a renter’s policy does not provide protection for the building structure. A typical renter’s policy can provide insurance protection for the following.
- Personal Property: covers the contents of the home, such as furniture, appliances, or clothing. Coverage is generally provided on a named-peril basis. Perils that are not named are excluded from coverage. Certain types of property may have specific dollar limits.
- Loss of Use or Additional Living Expenses: if a rented home is damaged by a covered peril, loss-of-use coverage helps meet the costs of hotel bills, apartment or rental home, eating out, and other living expenses, while the home is being repaired.
- Personal Liability: provides protection against legal liability for bodily injury or property damage if a third party is accidentally injured.
- Medical Payments: also known as guest medical payment, this section provides coverage if a third party is accidentally injured and needs medical treatment.
- Building Additions and Alterations: covers improvements, fixtures or alterations made by a tenant, such as paint, wallpaper, carpets, drapes, and blinds.
Understand the Policy
An insurance policy is a written contract between the insured and the insurance company. The protection provided by the policy typically represents a significant part of an individual’s overall risk-management program. Thus, it’s important for an insured individual to read and understand key policy provisions.