Let’s imagine for a minute. You live in California, near the coast. It’s a dream – the sun shines brightly, the beach is within biking distance, it is fun in the sun time in your life. Cyclone season comes and your area gets hit by a tropical storm, nothing fatal, but frightening and damaging. The roof on the bungalow you rent starts leaking.
You call your landlord who calls a roofer. After the roof is fixed, you ask a couple of friends to help you with the water damaged furniture in the house – the couch has to be replaced, as well as the coffee table and area rug. While helping you your friend slips and falls, breaking his wrist. You call your landlord again and ask if he’s already talked to his insurance company about replacing your furniture. He says no. You ask about having your friend’s medical bills covered. Again, the landlord says no. Now you have to replace $2,000 of furniture out of your pocket, and your friend has tens of thousands of dollars of medical bills to pay for out of pocket.
The landlord’s hazard insurance policy for the rental home only covers the building and outbuildings, and does not extend coverage to the tenant’s belongings or liability if someone is injured on the rented unit. Many tenants do not realize their possessions are at the mercy of any number of losses with no coverage whatsoever from the landlord’s insurance.
So what does renters insurance cover? Renter’s insurance protects the tenant from loss of personal belongings and from liability that could be incurred from property damage or bodily injury to others. A renter’s policy is called an HO-4 Contents Broad Form (Apartment Dweller’s Coverage).
A typical tenants insurance policy had two main parts – personal property and liability.
Property coverage covers personal property, wherever it is located, that is owned or used by the insured and insured’s relatives who live in the household. Personal property is insured against natural or man-made damage or loss. Man-made perils include fire, theft, falling objects, explosion, riot or civil commotion, aircraft, vehicles, vandalism or malicious mischief, theft, accidental discharge or overflow of water or steam from within a plumbing or sprinkler system, and sudden and accidental damage from artificially generated electrical current lightning.
Natural perils include windstorm, hail, smoke, weight of ice or snow, and volcanic eruption. Some states have mandatory or additional amendments that cover natural disasters in those states, such as earthquakes in California. Also, it is important to note that renter’s insurance policies do not cover damages caused by flooding, back up of sewers or drains, war, nuclear hazard or intentional loss created by the insured.
What does renters insurance cover? Some of the included perils are subject to limitations. Theft, for example, covers loss from attempted theft and loss of property from a place where the property is likely to have been stolen but does not cover a mysterious disappearance, theft committed by the insured or at construction sites.
Watercraft, related equipment, trailers and campers are not covered away from the residence. Certain personal property, such as jewelry, cash, coins, collectibles (such as stamp collections), and silverware, is only insured to a limit. Many people opt to list these items individually as “scheduled items” with a specific value for each.
Another coverage for renters is “loss of use”, which covers increases over normal living costs if damage or loss renders a residence unfit for occupancy. Loss of use will cover an increase in costs for food and shelter, for example, if the residence is damaged from an included peril. Loss of use usually only covers these increases for a certain period of time while the residence is being repaired.
The liability coverage protects the policy holder from legal liability for bodily injury or property damage to others, and pays for medical or other related expenses for others who are injured through personal activities. Liability coverage does not include liability as a result of business activities, motorized vehicles and watercraft.
We hope this article on what does renters insurance cover? has been informative. Renter’s insurance covers damages and loss from a number of perils and helps renters stay on their feet in the event their home becomes uninhabitable. A comprehensive insurance policy tailored to the renter’s needs will offer the best coverage at the most affordable price.
