What is Renter's Insurance?
If you do not own your home, you probably do not have to insure the dwelling and other structures, but you still need insurance for your own property. There is a special type of home insurance available for renters, designed to protect the things that are important to you without the added expense of insuring things that are not your concern.
Landlord Insurance Coverage
In a rental property, the landlord is considered responsible for all permanent structures as well as the dwelling itself. A landlord policy does not cover damages or injuries related to a tenant's property, nor does it provide for replacement of tenant property except where that property was lost or damaged as a result of the insured structures or liabilities.
HO-4 is Renters Insurance
The renters insurance policy is a special type of homeowners insurance, called the HO-4 policy. This type of policy includes personal property coverage and liability damage and injury protection. All property covered by a landlord policy is excluded from a renters policy. It is meant to insure a person or family's possessions and financial stability, regardless of the liabilities of the building owner.
Named perils differ from policy to policy, but typically include as many as 17 different potential risks. The likelihood of each risk will affect the cost of insurance in the region, and may affect what perils are included in the standard policy. Here is a partial list of perils that are covered by most policies:
- Fire or lightning
- Windstorm or hail
- Riot or civil disturbance
- Vehicles, including aircraft
- Vandalism or malicious mischief
- Volcanic eruption
- Falling objects
- Weight of ice, snow, or sleet
- Accidental discharge or overflow of water
Note, flood insurance for renters must be purchased separately.
Replacement or Cash Value
Renters insurance can be purchased for cash value or replacement cost coverage. Replacement cost will cost a little more on the premiums but will replace your lost property regardless of the current price. Cash value coverage will only pay out the depreciated value of your property, which is typically a percentage of the actual cost to replace lost items.
Renters Insurance and Pets
If you have pets, renters insurance is a good idea. Listing your pets on your renters policy will provide protection if a liability situation, whether it is damage or injury related, arises as a result of your pets. Even an aquarium could burst and cause damage to your property and the building, so the need for insurance is not limited to dogs or cats.
Cheaper Renters Insurance
You can save money on renters insurance, as with other home policies, by taking advantage of discounts offered by the insurance company. Discounts may be related to the location of the home, security devices installed on the property, or related to your personal information. There are over a dozen discounts available, but not all discounts will be available from every company.