Most homeowners know the value of home insurance and carry enough coverage to protect their property and the life they’ve built. But what about when you’re renting – do you have to protect a property you don’t own?
While most landlords who lease living spaces are highly motivated to protect their rental property against fires, break-ins and other damage, not a lot of tenants share their motivation. Many renters don’t feel a strong need to protect property they don’t own because it’s not theirs or they believe that the building insurance covers everything. But that’s not true.
Even when your apartment rental is fully furnished with appliances, most of the contents that make it your home are still yours, and yours to protect. That’s where renters’ insurance comes in. Learn more about what it covers and why you need it:
What is renters’ insurance?
Renters’ insurance is much like home insurance: it’s designed to cover your personal property in a rented home. Whereas home insurance includes coverage for both the dwelling and its contents, renters’ insurance is focused on what you own in your rented home.
Just like home insurance, it protects your personal property against the most common risks faced by homeowners, such as fire, theft, vandalism and other disasters. Renters’ insurance also provides liability coverage for injuries that occur in your rental, or damages to your possessions.
Renters’ Insurance Myth: My Landlord’s Insurance Covers Everything
One of the most common misconceptions that prevents renters from securing their rented home is the belief that their landlord or building’s insurance policy extends to their personal property. This isn’t true. And this gap in coverage could be the difference in being able to afford replacements or not.
The fact is, your landlord’s insurance will only cover the dwelling and structural damages to it, as well as contents owned by your landlord, such as appliances they bought for the rental. Everything else that’s yours should be covered by your own renters’ insurance policy. Under your landlord’s insurance coverage, your apartment may be repaired or rebuilt, but damaged or lost personal property are your responsibility.
What does renters’ insurance cover?
As a type of home insurance, renters’ insurance is designed to cover your personal property in the event of named perils, or the most common risks of disaster faced at home. Typically, these include fire, theft, vandalism and certain weather-related damage.
Depending on your policy, you may also be covered for hail, explosions, riots, volcanic eruptions and damage caused by aircraft or vehicles. Keep in mind, though, that you may need additional coverage for floods and earthquakes, as these are not typically covered under standard home insurance policies.
Your renters’ insurance provides repair or replacement coverage and financial cover for the following:
- Personal property: Coverage for everything you own in your rented home, such as furniture and appliances, electronics, clothing and other personal items.
- Liability: Coverage for injuries that occur in your rented home, or other damages suffered by a third party for which you are held responsible. Liability coverage also pays for damage that you and other residents of your home may cause to others, and includes both court judgments and legal fees, up to the policy limit.
- Additional living expenses: This crucial coverage can be used towards short-term rentals, hotel stays and other related expenses while your rental is under repair or being rebuilt following an insured loss.
How to File a Renters’ Insurance Claim
Following a fire, theft or other insured loss, you can file a renters’ insurance claim to repair or replace your damaged property, or pay for damages that you are held liable for.
To ensure a smooth claims process, it’s important that you always know your coverage amount and what’s covered. It’s also helpful to keep a running inventory of everything you own with photos and videos, and information on their make, model and value to ensure you claim the right amount within your coverage limit.
Depending on your policy, renters’ insurance can take the form of actual cash value or replacement cost. Actual cash value pays what your lost belongings were worth at the time of loss, while replacement cost pays for the full cost of replacing lost items.
What Isn’t Covered by Renters’ Insurance
Renters’ insurance is a worthy investment for securing what you own in your home, even when you’re not the homeowner. But like any insurance policy, bear in mind that there are limits to what can be repaired or replaced in the event of a disaster.
- Other property damage: Most home insurance policies do not automatically cover damage caused by sewage backup, earthquakes, floods, wind, and other acts of nature. If you are renting a home located in an area at high risk for these events, you may consider additional coverage to secure your personal property.
- High-value items: Your renters’ insurance policy sets a coverage limit—a specified amount for insured losses. Any personal belongings you lose in an insured event can be repaired or replaced, within this limit. But if you own high-value items, such as high-end electronics, jewellery, art and other valuables, you may need a rider to increase your coverage limit and ensure that these items are covered.
- Negligence and intentional acts: Renters’ insurance may cover a wide range of property damage, but this does not include damage you or other residents of your home caused due to negligence or intentionally.