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What Does Renter's Insurance Cover?

written by: csherwood•edited by: Donna Cosmato•updated: 10/14/2010

With many landlords requiring their tenants to carry renter's insurance it is important to understand what renter's insurance is. This is especially true when figuring out what exactly your policy covers.

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    Introduction to Renter's Insurance

    When deciding to rent your home rather than buy, you are presented with the option of adding rental insurance to help protect yourself as well as your belongings. Although more than 75 percent of renters do not currently use renter’s insurance, more and more landlords are beginning to require the insurance as part of the lease agreement. Whether or not you are required to carry the insurance, it can be a lifesaving tool if something goes wrong during your time in a renter’s contract.

    When you apply for renter’s insurance, you are applying for protection from getting your personal property stolen, as well as protection for yourself if you hurt someone, or someone’s property while living on your rental property. Most likely your coverage will include theft protection, named peril protection, and in many cases liability protection.

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    Theft Protection - Renter's Insurance

    Theft protection is one of the most substantial parts of rental insurance. Theft protection means that if your property is stolen either inside the rental home, or in many cases in a car or other vehicle parked on the premises, you will be reimbursed up to a set amount decided on by the contract you sign. The amount of money you are eligible to be reimbursed with, as well as the cost of your insurance, will be affected by how much protection you choose to cover yourself with. In most cases, after a theft has occurred, you can call your insurance provider with the police report number and the list of stolen items, and you will be reimbursed within weeks. This reimbursement will come minus the deductible, of course. The deductible size will vary depending on the type of coverage, and insurance company.

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    Named Peril Protection

    The next aspect of most renter’s insurance plans is named peril protection. This means that if your rental is damaged by disasters such as fire, lightning, hail, electrical surge, water, smoke, explosion, or any other disaster as listed in your rental insurance agreement, you will be reimbursed for any damage done to your property. In many cases your rental insurance will also cover other related expenses such as temporary housing, moving costs, and security deposits related to having to move residences because of the disaster.

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    Liability Coverage - Renter's Insurance

    The final area that is optional in many rental insurance plans is liability coverage. Liability coverage protects you in the case that someone is hurt in your rental home. This does not cover those that were purposefully hurt or killed in your home. Liability coverage varies depending on your policy, but minus the deductible can cover the medical expenses of the person hurt up to a specific maximum amount.

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    It is important to realize that your renter’s insurance coverage will vary depending on how much you choose to spend, and what company you choose to get your coverage from. You should always ask as many questions as you can about your coverage with your insurance agent before committing to a coverage plan. If you are unsure what your coverage includes, contact your insurance agent for more specific details.