Many renters mistakenly assume that their landlord's homeowner's policy will cover them if disaster strikes. Unfortunately, that's not true. The landlord's homeowner's policy will cover the building itself but not any of the contents, including your belongings. That's where renters insurance comes in.
If your apartment or home is destroyed in a fire and everything you own is gone, renters insurance will cover the financial loss and help you rebuild your life. If your home is broken into and your TV, computer and jewelry are stolen, renters insurance has you covered. For a small monthly premium, renters insurance can protect the things you've worked so hard for.
Renters insurance covers all the property in your home, including -- but not limited to -- clothing, furniture, computers, electronics, jewelry, art, and appliances. The value of all of those possessions adds up quickly. Losing them all when you don't have insurance can be devastating. The average renters policy has $20,000 - $25,000 worth of coverage. If you have exceptionally expensive jewelry or art, you might need an additional rider to have them well covered.
Renters insurance is an inexpensive way to protect your property. It covers you for damage or loss due to 16 different types of perils:
It's important to note that while most renter's policies will cover you for water damage caused by broken pipes and overflow, they do not cover you for flood damage. Flood and earthquake coverage must be purchased separately.
Another benefit to having renters insurance is that if your home becomes unlivable because of water or fire damage or any other covered peril, renter's insurance can also cover your temporary living expenses.
Like most homeowner's policies, renters insurance also typically includes liability coverage. That means that if someone is injured in your home, you're covered. If you're sued, your policy will cover court judgments made against you and any legal expenses up to the limit of your coverage.
An important aspect of renters insurance is deciding whether to purchase replacement value or actual cost value coverage. Renter's insurance comes in two types: actual cost value and replacement cost value. Actual cost value (ACV) pays you the value of the item(s) lost less depreciation. In other words, that five-year-old camera isn't worth what it was when you bought it; ACV will pay you that lesser value amount. Replacement cost value (RCV) pays you the actual amount it will take to replace the item(s) with something comparable. RCV premiums are higher, but you get a higher value too in having the means to go out and simply replace what was lost.