Tenant’s or Renters Insurance

Definition of Renters Insurance

Renters insurance is something promoted to renters of living spaces such as apartments, homes and trailers. Many renters mistakenly believe any losses to their property are covered by the landlord and his insurance policies. Still others are unsure what renters insurance is or what it covers. What is renters insurance? What types are there, and what do they cover?

  1. Identification

    • Renters insurance is a type of insurance policy geared specifically for people who are renting their living space in a residential setting. Renters insurance does not cover business or commercial losses. It is meant only for residential purposes.

    Function

    • Renters insurance is used to cover loss or damage of personal property of the insured. It can also be used to protect against loss or damage of other renters’ property and against liability issues that are caused by another renter who caused damage to your property if they have this insurance. Renters insurance helps alleviate the financial burden of rebuilding after major loss while renting a residential unit.

    Types

    • There are two types of renters insurance coverage, actual value and replacement value. Actual value coverage pays the cash value of your property. Often, this results in the coverage paying less than the amount of a new item such as furniture. Replacement value is what you would get if you were to buy the item new today regardless of the value of the item. This also could result in less than what was lost if the item has gone down in value or has been replaced by a less expensive newer items such as electronics.

    Features

    • Renters insurance has many features. Not only does it cover the personal property of the insured, it also often covers living expenses if you are forced to find another place to stay while your apartment is being repaired. Another feature of renters insurance is the low cost. This is one of the lowest cost types of insurance policies available, most often a policy can be found for the cost of coffee for a month.

    Significance

    • Without renters insurance, u would be liable for any damage your property has on the rented space you occupy or surrounding you. Without renters insurance, you also could be financially responsible for damage to other people’s property in surrounding damaged units. Renters insurance also helps pay for temporary living expenses in case of natural disasters such as fires or flooding.