If auto insurance covers your vehicle, homeowners insurance covers your home and life insurance (essentially) covers your life, then it would stand to reason that renters insurance would cover the home or apartment you are renting…
NO! This is a very common misconception, renters insurance does not cover the home or apartment you are renting. The physical structure itself is covered by your landlord’s insurance policy, a policy that specifically excludes YOU (the tenant), your property and any injuries or accidents that you could be found liable for in a lawsuit from any sort of protection.
Renters insurance covers the personal property INSIDE your rental, as well as various personal liabilities. For example, if a broken pipe causes destruction to your home furnishings or a thief breaks in and steals your new flat screen TV, you can file a claim with your policy provider and be reimbursed for the damaged or stolen property.
Additionally, many renters insurance policies also cover property losses that result from a fire or smoke damage, windstorms, lightning, vandalism, water damage NOT caused by floods (protection from flood damage requires a separate Flood Insurance policy) and Additional Living Expenses (ALE) in the event that you are forced to pay for a hotel while your home is undergoing repairs.
What Kind of “Personal Liabilities” Are Covered by Renters Insurance?
The other big advantage to purchasing a renters insurance policy is that it helps protect you, and your family, from the complete and utter financial ruin that could occur as the result of a lawsuit in which you are found to be personally liable for damages.
For instance, let’s say that someone had an injury or accident at your apartment, or that your dog got a little too rambunctious with his “guard duties” and gave the mail carrier a less than friendly welcome that resulted in injury, most policies would pay for medical bills or legal expenses if there was a lawsuit, provided that you disclosed Fluffy’s existence to your policy holder and that the injury or accident in question was not due to your own personal negligence (more on that a bit later).
Your renters insurance policy can also cover damage that you accidentally caused to another person’s property; like if you’re visiting a friend or neighbor’s unit and unintentionally knock over their Fabergé egg collection, your renters insurance may help foot the bill.
What Does Renters Insurance NOT Cover?
As mentioned earlier, water damage from flooding is specifically excluded from standard renters insurance policies and requires a separate Flood Insurance policy to be protected. As a general rule, major natural disasters such as earthquakes or (and this is especially important to be aware of here in Southwest Florida) hurricanes are not covered by a standard renters insurance policy. You can, however, opt to purchase extra coverage for natural disasters either as a ‘rider’ on your existing policy or as a sperate policy. Your vehicle is also excluded, since it is (or, at least it certainly should be) covered by your auto insurance.
Also, it is essential that you understand there is a very important distinction in the insurance world between actions that are deemed to be “unintentional” or “accidental” and “intentional” or “negligent”. Any damage or injury resulting from your actions are absolutely, 100% NOT covered if you caused said damage or injury either intentionally or out of negligence.
Negligence is legally defined as a, “failure to use reasonable care, resulting in damage or injury…and may consist of either an act, or an omission to act when there is a duty to do so”. Simply put, if you leave the stove burner on and burn down your apartment building (or even just damage your own unit) your renters insurance policy will NOT protect you because the damage resulted from your own “failure to use reasonable care” when operating the stove, which is by definition a negligent action.
Additionally, insect or vermin infestations are excluded from standard renter insurance policies, as they are considered to be a “Standard Home Maintenance Issue”. What that means is it is your responsibility to act quickly and appropriately to eliminate and, furthermore, prevent, any incidences of critters infesting your living space.
Obviously, there are A LOT of variables when it comes to what may or may not be covered under a particular renters insurance policy…and we’ve only just begun to scratch the surface!
Stay tuned for our next blog, “What is Renters Insurance and Why Do I Need It? PART II” where we will discuss some of the more nuanced aspects of renters insurance. Including the coverage variances of an “All-Risk” versus a “Named Peril” policy and the reimbursement differences between “Actual Cash Value” and “Replacement Cost Value” policies.