Insurance is supposed to give you peace of mind, but there’s a reason your policy is so well printed: you may not have the coverage you expect. As with any other insurance policy, tenant insurance also has exclusions. Knowing these in advance can help you avoid unexpected bills in the event of a disaster.
However, it is just as important to know what is covered. The fine print on your policy is likely to have coverage that you may not expect, which can save you money later.
COVERED: BELONG OUTSIDE YOUR HOUSE
Most renters know that the insurance covers personal items in their home, but may not realize that their property is likely to be insured off-site, including when traveling. Barbara Madvin, Insurance Agent at Gaspar Insurance Services, says vehicle break-ins are some of the most common insurance claims she sees for renters. While damage to the car itself is usually covered by your car insurance, your renter insurance pays for items stolen from the vehicle if their value exceeds your deductible.
Your tenant insurance will also cover your belongings if you take them from your home to a storage unit, friend’s house, or other location to protect them from an insured disaster. This can be particularly valuable in the event of a forest fire or hurricane evacuation, according to Christine G. Barlow, a chartered non-life insurer. This coverage usually lasts 30 days.
COVERED: HOUSING EXPENSES IF YOUR RENT IS NON-PREVENTABLE
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While your home is being repaired due to a fire or other insured disaster, your insurance company will usually pay for you to keep your normal standard of living elsewhere.
A “normal standard of living” is wider than you might think. For example, if you live in a rental home with a pool that you use on a daily basis, “the haulier needs to get you to a location where you can access a pool,” says Barlow, who is also editor in chief at FC&S Expert Coverage Interpretation , a trade journal. If you have pets, your insurer should find pet-friendly accommodation for you or the animals should get on where they would normally be.
NOT COVERED: COMMON disasters
Most tenant insurances will only cover your property in certain scenarios or “named hazards” that are listed in the policy – e.g. B. Fire, theft and wind. “If something is not mentioned on this list, there is no coverage,” says Barlow.
For example, flood damage is almost always excluded from tenant insurance and usually has to be purchased separately. (One exception: the USAA, which serves military families, includes flood insurance with standard tenant policies.)
NOT COVERED: BRAND NEW STAFF
Madvin recommends asking if replacement cost coverage is included in your policy. If not, your stuff will only be covered for its depreciated value, which is often not enough to purchase brand new replacement parts.
For example, let’s say your 10 year old TV is stolen and the replacement cost is not included. “The carrier will say,” OK, you paid $ 1,000 for this 10 years ago. We’re giving you $ 250 for it now, ”says Madvin. With replacement coverage, you get enough to buy a new television.
NOT COVERED: EXPENSIVE VALUES
Most rental insurance policies only cover jewelry and other expensive items up to a certain limit stated on the policy, typically $ 1,000 to $ 2,000. For example, if you have an expensive engagement ring, both Madvin and Barlow recommend adding a separate cover. Assessment is usually required.
HOW TO AVOID SURPRISES
Before taking out tenant insurance, make an inventory of your belongings. “Most tenants underestimate how much material they have,” says Barlow, which can lead to a coverage gap. Barlow recommends using the Encircle app to upload photos of your belongings and appreciate their value. Other similar apps are Sortly and Allstate’s Digital Locker.
Read your guidelines carefully. Barlow suggests marking it with what is green and what is not red. Madvin recommends paying particular attention to the policy notes, which are usually add-ons or exclusions to standard coverage.
Confused by all legalists? Contact an expert. Talking to an insurance agent or broker about your options can help ensure that you understand the policy you are buying. “If you don’t really know the insurance,” says Barlow, “it’s very easy to overlook coverage that you need, or to fail to see that something is not covered.”
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This article was made available to The Associated Press by the personal finance website NerdWallet. Sarah Schlichter is a writer at NerdWallet. E-mail: [email protected]
Related links:
NerdWallet: What is Tenant Insurance and What Does It Cover? http://bit.ly/nerdwallet-renters-insurance.
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