Even if you don't own a home you can protect your property. Renters insurance provides you with financial protection against the loss or damage of your property when you rent either a house or an apartment. In most cases, your landlord's insurance policy will not cover the loss of your possessions. This is why renters insurance is so important. It protects your physical belongings, but not the building or house itself.
Renters insurance covers your personal property against theft, fire or smoke, vandalism, explosion, wind and water damage. Additionally, renters insurance covers your liability to people who are injured in your apartment or house. This coverage extends to injuries caused by your pets. Finally, if for any reason you have to go to court as a result of a claim filed against you, your renters insurance will cover your court costs.
If you are displaced due to a fire or acts of peril, your renters insurance will cover your living expenses. Typically, policies reimburse you for expenses over and above what you pay for normal living expenses. Coverage will vary from one policy to another. Therefore, be sure to check the provisions of your individual policy.
There are two types of renters' insurance policies available:
- Actual Cash Value replaces your possessions after being adjusted for depreciation up to your policy limits.
- Replacement Cost covers the cost of replacing your possessions up to your policy limits. There is no depreciation deduction with this option.
Most standard renters policies offer limited coverage for jewelry, furs and other property that you routinely take outside of the dwelling. If you require additional coverage you can purchase a separate "floater" policy. A floater policy is a supplemental policy that provides additional coverage for your valuables.