With the right renters insurance policy, your personal belongings can be covered due to theft, accident, or natural events regardless of where your loss occurred—your home, car, storage unit, moving van, or even a friend’s house. With the right coverage, you can feel protected for a wide range of situations.
What is Renters Insurance?
Renters insurance is a form of property insurance. It covers losses of your personal property and protects you from liability claims resulting from accidents within your home that are not the fault of your landlord. The goal of buying renters insurance is to protect you from financial hardship following a loss or a liability claim. You, the insured, pay an ongoing payment to an insurance company in exchange for a financial guarantee that the company will carry the burden of a large potential loss or liability that could result in an undesirable and possibly unaffordable personal financial hit.
While landlord insurance covers damage to the building you are living in, and covers injury suits due to a structural building problem, only you can protect your own possessions inside and outside your dwelling.
Renters insurance policies are not all alike, and they are typically multi-faceted. No one policy fits everyone. Therefore, you will want to work with a trusted insurance agent who can tailor your policy to fit your particular assets and lifestyle.
Renters insurance consists of three different types of coverage:
- Personal property: covers your personal property if it is stolen or damaged by a covered peril (like fire, vandalism, or short-circuit damage, for example).
- Liability coverage: covers you if you damage someone else’s property or someone is injured in your home.
- Loss-of-use coverage: covers the cost of living elsewhere if your home becomes temporarily uninhabitable.
Does Renters Insurance Cover Stolen Items From a Vehicle?
Yes, good renters insurance in Raleigh does. Whether your belongings are damaged in, or taken from your home, car, moving van, or camper, a rental insurance policy can cover all of these losses. And keep in mind that while damage to your car is covered by your collision insurance policy, your renters insurance can cover belongings damaged in the car, including any radio or stereo equipment installed by the manufacturer.
So, if your luggage, musical instruments, laptop, or expensive clothing are taken from your car or moving van, or if they are damaged in a collision, your renters policy can cover all of these types of items.
What’s the Difference Between a Replacement Cost Value Policy or Actual Cash Value Policy?
- Replacement cost value policy (RCV) pays you the full cost of replacing your item with a new item (the brand-new current value)
- Actual cash value policy (ACV) pays you what your property was worth at the time of your loss (the depreciated value)
Your agent will help you determine the value of your items and whether an RCV or an ACV policy makes the most sense. While ACV is less expensive, the difference in cost (sometimes around 10%), might be worth it to ensure, for example, that you will get a new couch instead of a couple hundred dollars for your old depreciated one.
Items that are considered difficult to replace may be subject to a limited replacement amount (referred to as limited liability). This means that the insurance company is only obligated to pay a certain amount out. If this pertains to any of your items, your insurance agent should go over the limit with you to help you decide if you want to buy additional coverage as an endorsement.
What is NOT covered by Renters Insurance?
There are some situations in which your renters insurance may not cover a particular item such as when your item is damaged by uncovered perilous events, or when the value of your item exceeds your policy.
Examples of things that most policies do not automatically cover include unusually expensive or valuable items, such as:
- High-end electronic equipment,
- Fine jewelry
- Musical instruments
- Fine art or antique collections
In these cases, you may need to purchase floater insurance in the form of a rider.
Examples of events that most renters policies do not automatically cover include:
- Backup of sewage into your residence
- Other “acts of God”
- Losses caused by a tenant’s own negligence or intentional acts
Typically these events can be covered for an additional premium.
Can you customize a policy to fit your coverage needs using riders and endorsements?
Yes, as indicated above, you can add endorsements to your policy to extend more coverage to valuable items. You can also add coverage for potential losses due to perilous events that are not automatically covered such as an earthquake or hurricane.
It’s a smart idea to review all of your exceptional items and natural disaster risks to determine how best to customize your policy with your insurance agent.
How and Where do I get Renters Insurance?
To be able to talk knowledgeably about what you want insured with an agent, it’s a good idea to create a list (and later a video) of everything you might want protected from loss and its value. For expensive items, make sure to write down any serial numbers you have to help verify a potential claim. Creating a spreadsheet can be very useful in cataloging your items and realizing their true value. You might be surprised! Most people tend to underestimate the total value of things they own. This documentation will be indispensable if you ever need to file a claim. Keep this inventory in a safe place, either virtually or outside your home in a safety deposit box or with a friend or family member.
As with all types of insurance, the lower your renters insurance deductible, the higher your premiums will be. Compared with homeowners insurance, renters insurance is relatively inexpensive, according to the National Association of Insurance Commissioners (NAIC) and the Insurance Information Institute. Discounts are also available based on any measures you take to reduce risks such as burglar alarms, deadbolt locks, etc. Note that paying an entire year’s premium at once, instead of in monthly or quarterly installments, can also save you money.
In the end, selecting the renters insurance coverage that is right for you comes down to knowing your individual property items and how comfortable you are with the risk of having to replace property items on your own. With over 90 years of experience in insurance among our team at Dan Thompson Agency in Raleigh, NC, we can answer all your questions about renters insurance.
Give us a call at 919-781-6564 if you are in North Carolina, and we’ll get you the property and liability coverage you need to feel fully protected and confident.