Renters Insurance

Renters Insurance - Protecting You and Your Personal Possessions

In all likelihood, your landlord has insurance on the building you call home. It protects your landlord against liability claims and covers the building as well as personal possessions the landlord may have on the property. But it doesn't cover you against liability claims and it doesn't protect your possessions.

Generally, renters insurance policies protect your personal property against loss from fire, theft, lightning, windstorm, hail, explosion, smoke, vandalism and a long list of other hazards. If you have to move to temporary quarters because of damage to your building your additional living expenses, such as hotel or motel charges and the cost of dining out, may be covered under some policies at an additional charge.

Renters policies may also protect you if you are legally liable for accidental death or injuries to others on your premises, or for the actions of family members or pets. If a person is accidentally injured in your home, or by any family member or pet, medical care payments may be covered, regardless of liability.

Remember, the only real difference insurance-wise between a renter and a home owner is the ownership of the dwelling.

(TDI Excerpts)

Why do I need renters insurance?

News reports of apartment fires often include tragic stories of renters who lost everything because they were uninsured. If you rent an apartment, duplex, house, or townhouse, your landlord´s insurance policy covers losses to the building, but it does not cover your personal property. To protect your belongings, you need a separate renters insurance policy. Renters insurance covers your personal property and household items in the event of a fire, theft, or other loss. It also offers you financial protection if a visitor is injured in your home.

How does renters insurance protect me?

Renters policies, officially known as "tenant homeowners policies," do two things for you:

Is my personal property covered when I´m away from home?

Yes. When you travel, your luggage and other personal items are covered for up to 10 percent of the amount of your policy or $1,000, whichever is greater.

How much does renters insurance cost?

Renters insurance premiums typically average about $20 per month. However, rates vary widely among companies. It pays to shop around. Get premium quotes from several companies for the amount of coverage you want. Also, look at the financial stability and service record of the insurance companies you´re considering.

Do all renters need insurance?

No. Dependents, such as college students, are covered by their parents´ or guardians´ homeowners policies while temporarily living away from home. Personal property at the rented dwelling is covered up to 10 percent of the personal property limit of the parents´ or guardians´ homeowners policy. For example, if the parents have an insurance policy with a personal property limit of $50,000, the dependent you would have $5,000 in personal property coverage. The dependent also is covered up to 100 percent of the liability provided by the your parents´ or guardians´ policy for claims involving personal liability and medical payments to others.

What policies are available?

The two Texas basic policy forms in Texas are standardized. This means the basic coverages offered by various companies are identical. Endorsements or policy add-ons that give you extra protection at a higher cost vary by company, however.

How much can I collect on a policy claim?
A renters policy normally will pay for the actual cash value of the property you lost. This means that depreciation and wear and tear will be subtracted from the value of your property when your claim is paid. However, you can add replacement cost coverage for about 15 percent in additional premium. Replacement cost coverage pays the full cost of replacing your damaged property, minus your deductible. Most renters policies in Texas carry a deductible equal to 1 percent of the amount of the policy. For example, if you have a $25,000 policy, you would pay the first $250 of a claim and the insurance company would pay the rest, up to the limits of your policy.

If I have replacement cost coverage, do I have to replace the property before the insurance company will pay the full claim?
It depends on the replacement value of your property. Your insurance company will initially pay the full replacement cost up to $1,500. For any remaining property damage that exceeds $1,500, the insurer will pay the actual cash value first. You must then actually replace or repair the property with an item of like kind and quality before the company will pay the balance of the claim.

Note: A complete inventory of your property can be helpful if you ever file a claim. Keep a copy of the inventory, along with receipts and photos or a videotape, in a secure place, such as a safe deposit box. These will help prove your losses to the insurance company.

Will my renters policy pay for a motel or other temporary residence if a fire forces me to move from my apartment?
A renters policy covers added living expenses such as motel costs if you´re temporarily displaced from your home or apartment. This "loss of use" coverage is limited to 20 percent of the personal property coverage under your policy. For example, if you have $25,000 of personal property coverage, your loss of use coverage would be $5,000. You will be paid up to this limit for the reasonable time required to repair or replace your rented property.