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When disaster strikes, it doesn’t care if you rent or own. Renters face the same risks as homeowners when it comes to protecting personal property. While you hope you’ll never need to use your renters insurance, it’s better to have it just in case. Here are the basics of a renters insurance policy.

What are the four types of coverage on a renters policy?

In general, renters insurance offers four types of protection:

  • Personal property. Covers your personal items like your clothes or your computer in case of loss due to a covered event.
  • Liability coverage. This coverage protects you against lawsuits from people who may have injured themselves on your property or were maybe bitten by your pet. 
  • Medical payments to others. Also covered is the cost of potential medical bills incurred by someone injured on your property as a result of your actions or negligence by you.
  • Additional living expenses. A policy provides financial protection against an insured disaster by covering living expenses if you have to temporarily relocate.

What does a renters insurance policy cover?

Insurance coverage held by a landlord or rental company only protects the building structure. It’s up to you to cover the contents inside the home. The most common covered events include fire, theft and vandalism, or electrical malfunctions. Certain weather-related damage and other named hazards may also be covered in the policy.

What a renters insurance policy doesn’t cover

While a renters insurance policy covers a lot, there are some things it doesn’t cover. Hazards such as sewage backup in your rental, earthquakes, floods and certain other “acts of nature” aren’t covered under a standard renters insurance policy. However, coverage for these items can be purchased for an additional premium if you feel it’s necessary.

If you have high value items like artworks, collectibles or jewelry you want specific coverage for, then you may want to consider purchasing a rider to your renters policy. This will ensure these items are covered for the appropriate dollar amounts. Otherwise, the items will be included in your general personal property coverage amount, which may not be enough.

How much does renters insurance cost?

Unlike automobile insurance and homeowners insurance, there are no minimum coverage amounts required for you to purchase renters insurance. You select how much coverage you want for personal property, liability, medical expenses and additional living expenses.

The best practice to determine the amount of personal property coverage you’ll need is to make a list of all the personal belongings you might need to replace in the event of a total loss. Then work with your insurance agent to determine an appropriate level of liability coverage and payment for additional living expenses.

Remember, the more coverage you add, the higher your premium will be. While renters insurance can be inexpensive, it’s important you work this additional expense into your monthly budget. You’ll also want to ensure you’re able to cover the deductible in the event you need to file a claim.

Most insurance companies, maybe even your auto insurer, offer a renters insurance policy. LGFCU can help with a renters insurance policy quote. Your insurer may even offer a discount for bundling your auto and renters insurance together. It never hurts to compare the cost of renters insurance policies. 

The advice provided is for informational purposes only. Contact your insurance representative for additional guidance.

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