Here are some things to consider when deciding whether or not to insure your belongings in an apartment.
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It covers losses to personal property.
A renter’s insurance policy protects against losses to your personal property, including clothes, jewelry, luggage, computers, furniture, and electronics. Even if you don't own much, it can quickly add up to a lot more than you realize – and a lot more than you'd want to pay to replace everything. According to esurance.com, the average renter owns about $20,000 worth of personal property. [L2]
Renter's policies protect against a surprisingly long list of perils. A standard HO-4 policy designed for renters, for example, covers losses to personal property from perils including:
- Damage caused by aircraft
- Damage caused by vehicles
- Explosion
- Falling objects
- Fire or lightning
- Riot or civil commotion
- Smoke
- Theft
- Vandalism or malicious mischief
- Volcanic eruption
- Weight of ice, snow or sleet
- Windstorm or hail
- Damage from water or steam from sources including household appliances, plumbing, heating, air conditioning or fire-protective sprinkler systems
Note: Losses resulting from floods and earthquakes are not covered in standard policies. A separate policy or rider is required for these perils. In addition, a separate rider might be needed to cover wind damage in areas prone to hurricanes. And renter’s insurance policies don't cover losses caused by your own negligence or intentional acts. For example, if you fall asleep with a lit cigarette and cause a fire, the policy most likely will not cover the damage. To learn more, read Eight Financial Safeguards If Disaster Strikes and the Hurricane Insurance Deductible Fact Sheet.
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It provides liability coverage.
Liability coverage is also included in standard renter’s insurance policies. This provides protection if someone is injured while in your home or if you (or another covered person) accidently injure someone. It pays any court judgments as well as legal expenses, up to the policy limit.
Most policies provide at least $100,000 of liability coverage, and between $1,000 and $5,000 for medical-payments coverage. You can request (and pay for) higher coverage limits. If you need more than $300,000 of liability coverage, ask your insurance company about an umbrella policy, which can provide an additional $1 million worth of coverage for about $150 to $300 a year.
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It covers your belongings when you travel.
Renter's insurance covers your personal belongings, whether they are in your home, car,or with you while you travel. Your possessions are covered from loss due to theft and other covered losses anywhere you travel in the world. Check your policy or ask your insurance agent for details on what constitutes "other covered losses."
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It may cover additional living expenses.
If your home becomes uninhabitable due to one of the covered perils, your renter's insurance policy may cover “additional living expenses,” including the cost associated with living somewhere else temporarily, food and more. Check with your policy to find out how long it will cover additional living expenses, and if it caps the amount the company will pay.
