Understanding Renters Insurance
Lisa, a member of our marketing team, lived with her husband and son in Richmond. She knows firsthand how essential renters insurance is in protecting families from significant financial loss while renting. Now a homeowner near Tappahannock, Lisa still recalls the peace of mind her renters insurance provided during that time in her life.
Here's Lisa's straight talk:
Understanding Types of Renters Insurance Coverage
Personal Property Coverage
The policy can replace or repair items such as appliances, furniture, clothing, and other personal belongings if they are damaged or stolen due to a covered event. This coverage safeguards your personal property, including items like furniture, apparel, shoes, electronics, household goods such as bedding and rugs, and most sporting or hobby equipment, including bicycles and musical instruments. Certain valuables, such as jewelry, artwork, collectibles, and specialized computer or hobby equipment, may require additional coverage if their value exceeds standard policy limits.
Renters insurance can also extend coverage to personal belongings stored in a storage unit. It protects your items from covered perils, such as fire, water damage, and vandalism, but may be subject to sublimits. These sublimits can reduce the coverage amount for your belongings and are sometimes only 10% of your total personal property coverage.
Renters Insurance and Theft
Renters insurance typically provides coverage for theft of your personal property, even if the loss occurs away from your rental residence. It also extends to personal items stolen from within your vehicle. Renters insurance does not, however, cover the loss or damage of the actual vehicle due to theft, nor does it protect the physical structure of your rental property itself in the event of theft-related damage.
Liability and Medical Expense Coverage
Renters insurance provides liability coverage, which helps cover medical expenses and legal fees if someone who does not reside in your home is injured on your property. This coverage can also assist with expenses such as ambulance rides or hospital stays for guests injured in your home, up to your policy limits. Additionally, it can cover funeral expenses for individuals injured on your property, including accidental injuries, injuries caused by household pets such as dog bites, or accidental damage to another person’s property. If you require additional protection, you may enhance your personal liability coverage with an umbrella insurance policy.
Additional Living Expenses (Loss of Use)
Standard renters insurance may also cover living expenses if you need temporary accommodation while your home is being repaired, such as pay for hotel stays, restaurant meals or other expenses. Hotel fees and other living expenses can quickly add up to thousands of dollars.
What is a Peril in Renters Insurance?
A peril is a specific event or circumstance that can cause damage or loss to your property or personal belongings. In insurance, a peril is the direct cause of a loss that your policy may cover. Renters insurance policies clearly define which perils are included in your coverage and which are excluded.
What's Covered by Renters Insurance Cover?
Common perils, or events, that renters insurance includes are:
- Fire and smoke, including damage from wildfires
- Lightning
- Windstorms
- Hail
- Theft
- Explosions
- Vandalism
- Weight on sleet, ice, and snow
- Falling objects
- Power surges
- Riots
- Damage from cars and planes
- Freezing of household systems and damage from sudden plumbing events, such as ruptured pipes.
- Mold damage if it resulted from a covered peril, such as a burst pipe or storm damage, that also caused the initial water damage.
What is Not Covered by Renters Insurance?
These are perils commonly excluded from renters insurance coverage:
- Flood Losses: Damage resulting from flooding—including heavy rain, overflow of bodies of water, or similar sources
- High-value Items: Coverage limits apply to certain valuables such as jewelry, furs, and artwork. To fully insure these items, additional endorsements or riders may be necessary.
- Rental Unit Fixtures: Your landlord is responsible for fixtures and appliances that came with your rental property.
- Mold: Mold caused by tenant negligence, lack of ventilation, gradual leaks, external flooding, or ongoing maintenance issues
- Roommate Property: A renters insurance policy covers your personal property, but it doesn't cover your roommates' belongings, unless you're related or married.
- Earthquakes and Earth Movements: Losses caused by earthquakes, sinkholes, landslides, mudslides, or other movement of earth.
- Acts of Government and War: Damage caused by government action, acts of war, or nuclear hazards.
- Excluded Animal Liability: Certain dog breeds or individual dogs with a history of aggressive behavior or biting may be excluded or subject to liability coverage limitations.
- Pest Infestation: Issues caused by termites, rodents, insects, bedbug damage or removal of a bedbug infestation are considered to be a maintenance issue and are yours or your landlord's responsibility.
- Home Business Activities: Coverage for business property and activities from a home business are covered by a separate business insurance policy.
Understanding ACV vs. Replacement Cost Coverage
Renters insurance generally provides coverage for replacement of your belongings, subtracting the depreciation in value due to age or wear. This is referred to as actual cash value (ACV). This might mean you would have to cover the additional expense to replace an item in its original condition, which is more expensive today.
Replacement cost coverage (opens in a new window) can bridge this gap. This type of coverage can pay the current market price for those items. It's crucial to discuss replacement cost options with your insurance agent when selecting your policy. Learn more about the difference between ACV coverage and replacement coverage.
Reviewing and Understanding Your Renters Insurance Coverage
Once you understand the difference between actual cash value renters insurance and replacement renters insurance, it's important to determine how much renters insurance you need and then to annually review your coverage with your local insurance advisor. Consider any changes to your home, such as the purchase of high valued items and access the need to specific coverage for perils that are excluded from your renters insurance policy.
You may need to add specific endorsements or added coverage for risks unique to your property, such as flood insurance. When you review your policy with your local independent agent use your declaration page as a summary of your policy, a review items such as the named insured, the property address, policy period, coverage limits, deductibles, and premium. It's important to review the entire policy to understand the details of your coverage, exclusions, and limitations.
THE NORTHERN NECK INSURANCE INTEGRITY PROMISE — We pledge to provide straight talk and good counsel from our NNINS Virginia insurance experts through our blog. While we hope you find this to be a helpful source of information, it does not replace the guidance of a licensed insurance professional, nor does it modify the terms of your Northern Neck Insurance policy in any way. All insurance products are governed by the terms in the applicable insurance policy.
