Essential Facts About Home Insurance

Understanding the basic facts about home insurance is crucial to protecting your investment whether you are a first-time home buyer or an e...

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08/05/2017

Renter's Insurance: What Does It Cover?

 We all have so many questions about Insurance, the policy to buy and what it covers. I hope this article helps.
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A. Theft

1. General
An all-perils renter's insurance policy provides worldwide theft coverage for personal property. It doesn't matter where you travel to as an insured renter: Theft coverage travels with your belongings.
2. Car
An all-perils renter's insurance policy does not cover the theft of a vehicle. It does, however, provide coverage for personal property stolen with a vehicle or from a vehicle, and this applies wherever the vehicle is: in your home town, out of state or out of the country.
3. Bicycle
Bikes count as personal property, and as such, are fully insured. If you have an especially expensive model, it might be best to schedule it on the policy, as when insuring anything unique or of high value.

B. Mold

Coverage differs from one insurance company to another and from state to state. An all-perils renter's insurance policy typically provides a low set amount of coverage for damage caused by mold as long as it occurred from a covered peril. In a named-perils policy, mold coverage must be specifically included. If it isn't, mold coverage may be purchased through a rider.
The insured must make a good faith effort to remedy the problem as soon as it is detected. This includes contacting the owner or property manager of the structure. The owner is responsible for repairing and mitigating any mold, and dealing with the water leak or whatever caused damage in the first place. Both the tenant and owner policies could be used together to subrogate claims.
Subrogation is a term denoting a legal right reserved by most insurance carriers. Subrogation is the right for an insurer to legally pursue a third party that caused an insurance loss to the insured. This is done as a means of recovering the amount of the claim paid by the insurance carrier to the insured for the loss.

C. Water Damage/Flooding

An all-perils renter's insurance policy does cover water damage, if the damage is a result of a water leak inside the structure, like from a burst pipe or faulty water sprinkler. Damage caused by rising water from an exterior source, such as a flood, would not be covered by renter's insurance. Separate flood insurance would need to be purchased through the National Flood Insurance Program or a private carrier that offers flood insurance in the region where the dwelling is located (though you need only buy coverage for your belongings, not the building itself).

D. Storage Units

An all-perils renter's insurance policy provides coverage for the contents of storage units, excluding autos. It does not matter where a storage unit is located. Most policies limit the amount of off-premise coverage to around 10% of the total personal property coverage. Limits on the types of covered perils still apply. In certain areas, perils such as earthquakes and hurricanes may not be covered. Flooding from external rising waters would not be covered under a renter's insurance policy, either.

E. Personal Injuries

Renter's insurance provides two main forms of coverage – liability and contents insurance.
The liability insurance portion of your coverage can protect you in case a visitor is injured on your property.
In the event of a lawsuit, your renter's insurance policy would cover the legal costs and any payouts that you would be responsible for if you are found legally liable. Some examples of payouts would be a medical bill directly related to the accident or replacement of a third party's property that was damaged in your home.
Depending on your policy, your family members may also be covered against personal injury. For example, if your son, who lives with you in your rented apartment, has a guest over and that guest suffers a slip-and-fall injury due to your son's negligence, your renter's insurance would cover the legal costs and medical expenses of the guest.

F. Pet Damage

Most renter's insurance does not offer coverage, or at least full coverage, for pet damage. A policy that does offer that usually includes clauses in the contract specifying the types of scenarios in which the coverage applies.
Usually, it has to do with someone else, or someone else's property. A good scenario is this: If your dog rips up the carpet in your own apartment, it may not be covered, but if the dog chews up the alligator suitcase belonging to a house guest, it may be. Basically, if your pet is legally responsible for damage to a visitor's belongings, or bodily injury to the visitor, chances are that the pet coverage will assume the liability.

G. Bed Bugs

Renter's insurance policies do not cover bed bug infestations. Bed bugs are typically included in the same category as other vermin, such as cockroaches and mice. Detecting and cleaning a bed bug infestation is considered a maintenance expense and a responsibility of a renter.
Providers of renter's insurance exclude bed bug or any other type of infestation for numerous reasons. One possible reason is the difficulty in determining the cause of the infestation; it could be due to negligence or carelessness on the renter's part.

H. Moving

An all-perils renter's insurance policy covers damage to items resulting from a covered peril during a move, such as theft. Fire and water damage would also qualify you to file a claim, but there are limitations and exceptions to this coverage. Most policies do not cover general damage to items resulting from a move, such as broken dishes or furniture.
If you hire a moving company, the company is responsible for getting the items moved without damage. Check into a moving company's liability insurance to make sure it offers replacement cost coverage on any damaged items; often, the moving company's insurance settles claims based on weight or the items' actual cash value.

The bottom line is, after you buy a policy, take an inventory of all of your personal belongings, and include photos, videos and appraisals. Store this list in a safe place; outside your home, a safe deposit box, a trusted friend or family member, or better still, send it as an attachment to your mailbox. By inventorying items, insured renters can be properly prepared in the event of a claim. In the event of a loss, report the claim to the insurance company as soon as possible.

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