What Does Renters Insurance Cover?

What your renters insurance policy should include

Renters Insurance policies are very similar in what they cover but do vary from insurer to insurer. That said, most policies contain the same general type of coverages. I did a quick survey of some of the major insurance companies to see what they covered and this is what I found.



1. Personal Property Protection. This cover the loss or damage of your property via some "named peril". Some of these "named perils" include, but are not limited to:

• Fire or Lightning
• Windstorm
• Smoke
• Vandalism
• Theft
• Accidental Discharge of Water

2. Family Liability Protection. Liability Insurance helps protect you from the financial risk arising from injury or property damage that you or your family may cause to other people. This includes injuries or damage at or away from your property. It typically includes compensation for the injured party, the cost of defending you in court and any court awards or settlements up to the limits of your policy. If you don't have liability insurance you run the risk of putting all of your assets at risk. When I say all of your assets I mean all of them. This can include 401ks, stocks, bonds, checking & savings, and your personal property. Forking over $10 or $20 a month to protect yourself from this doesn't sound so bad does it?

3. Guest Medical Coverage. Let's say you invite some friends over for dinner and they bring their kids. After dinner, your kids and theirs head into one of the bedrooms to play. About a half-hour later you hear a loud BANG followed by a screaming kid. You run to the bedroom to find the kids have decided to re-enact the latest cage match from the WWF and one of them is holding their arm and crying. If your friends are good friends they won't sue you. It is nice to know though that your Guest Medical Coverage will reimburse them for their trip to the hospital. Your policy will be very specific on the type and amount of coverage in these situations.

4. Additional Living Expenses. Let's say you do suffer some serious damage during a hurricane and have to re-locate while construction is being performed on your apartment. A policy with this coverage will cover the costs you incur which could include food, temporary housing, and other expenses. Would you rather have this option or have to stay in your in-laws guest bedroom for six months?

Like I said, these are just some of the examples of coverages contained in typical renters insurance policies. When you have yours drawn up you should go over it with a fine tooth comb to make sure you have the coverage you need. If you have questions ask.

We'll talk about the amount of coverage you need in a future article.