How to Properly Cover Your Personal Property in a Renter's Insurance Policy

When you get a renter’s insurance quote, you should request coverage for your personal property and some personal liability protection at a minimum. Sometimes, however, people just “pick a number” for their personal items when they occupy rentals. This is usually a mistake. Here are some tips you should consider to protect yourself and your belongings.

• Make a complete list of all of your personal property. Not a partial list, a complete list.
• Take pictures of your stuff. Include everything of value, from your microwave oven to your TV to your golf clubs to your clothes. Don’t forget wall hangings, oriental rugs, lamps, furniture, etc. as any or all could be damaged.
• Set a reasonable value for each of the higher valued items (computers, TV’s, rugs, etc.) so you’ll have a negotiating point should you need to file a claim.
• Make a short video (optional). This action plan should not replace digital, Polaroid, or 35 mm pictures, but will only enhance your position when your stuff is viewed as part of the whole look and feel of your rentals.
• Get some third party evidence of values for higher priced items. Save your receipts or get some other evidence of the current value of items that are expensive. Using the Internet to visit other websites that sell similar items might be enough to give you evidence of value.

Making a home personal property inventory with pictures is the easiest, least expensive, and most effective method of using rental property insurance to your benefit. Insurance for renters is an absolute requirement that you should not overlook when you rent a home. Don’t short change yourself. Get the best coverage you can afford. And, don’t forget to keep your inventory in a safe place in the event of a fire or other physical disaster.

How Renter’s Insurance Is Different From Homeowner’s Insurance for Rentals

While there are many similarities between renter’s insurance and homeowner's insurance, there are a couple of significant differences when applied to rentals. If you’re going to rent a home, your cost will be lower than it would be with a homeowner’s policy. Here are the primary differences between the two.

1. Insurance for renters does NOT require any coverage for the home itself, or any other structures on the property (shed, garage, etc.). Since landlords -- not you -- own home rentals, you need not cover any structures (nor are you allowed to have coverage), including the house in which you live. Rental property insurance primarily provides coverage for
   1. Your personal property
   2. Liability protection.
2. Your renter’s insurance coverage for liability typically pertains to accidents, injuries, or other potential losses that occur within your home. Similar to the protection for the house, outbuildings, and other exterior items, your landlord should have liability insurance coverage for mishaps that occur on the property. Since liability claims can involve both small and very large amounts of money, you should have sufficient liability protection for any rentals you occupy.

Don’t forget that, even though you’re not typically required to cover the interior walls, ceilings, and floors of your rentals, the paintings, rugs (other than wall-to-wall carpeting), hanging lamps (if you’ve put them up), small appliances, electronics, clothing, and all other personal property should have renter’s insurance coverage. While it’s tempting to lower your premiums whenever possible, make sure you have a good idea what your personal property is worth and cover it adequately.

Take Inventory Of Your Valuables For Insurance

With renter’s insurance in home rentals it is also important to have any items that are worth a lot of money appraised for insurance values. Having these items appraised by a third party will help describe the value of the item and help to have it replaced if damaged or lost.

Actual Cash Value Verse Replacement Cost Coverage

If you have replacement cost coverage you will be reimbursed for the actual replacement cost of your lost property, up to the limit stated in your policy. Replacement cost coverage is usually more expensive in premiums but will pay out more if you need to file an insurance claim for items when you rent a home.

What Standard Renter's Insurance Policies Cover

Most standard renter’s insurance policies cover your personal property for the following scenarios:

1. fire or lightning
2. windstorm or hail
3. explosion, riots or civil commotion,
   
4. aircraft or vehicles damage
5. smoke
6. vandalism or malicious mischief
7. theft
8. damage by glass or safety-glazing
9. volcanic, falling objects, weight of ice and snow
10. water related damage from utilities, and electrical surge damage

Flood, earthquake, and hurricane insurance should be added on if you live in an area where this might be of concern.

Actual Cash Value Verse Replacement Cost Coverage

When you are looking into renter’s insurance, see if your insurance company is offering “actual cash value” (ACV) or “replacement cost coverage” for your possessions. ACV will pay you what your property was worth at the time of it being damaged or stolen minus the deductible. Replacement cost coverage will pay you what it costs to replace the item minus the deductible. Replacement cost coverage is usually the better of the two options if you have a choice.

Call Your Auto Insurance Agent

If you already have car/auto insurance, you should call your insurance carrier and get a quote for renter’s insurance. Many times insurance agents give a discount when you have multiple insurance policies with them. Since you already have a relationship with the insurance agents, it is a good idea to discuss your options with them and to keep your insurance together with the same company you like and trust.

Your Possessions Add Up To A Lot

If you think that you do not own anything of value and that you do not need renter’s insurance, think again. Most people own at least $20,000 worth in property and items. You will be surprised how all your belongings add up. Consider your closets and drawers filled with clothes, CD’s, books, appliances, and everything else around your rental home. Renter’s insurance can be as little as $5 a month and can be a great asset, if the time ever comes when you need it. It is definitely worth calling an insurance agent and getting an estimate and then evaluate whether you need it or not.

Take Inventory Of Your Valuables For Insurance

It is a good idea to take inventory of all the items you have in your home that has any value. You should keep an inventory list of all your items including the value and serial number of the items. You should also take photographs of your items, rooms, closets, storage units, and garage to prove ownership of items. You should also keep receipts for major items. Your inventory, photographs, and receipts should be kept in a safety deposit box or a fireproof and waterproof place.

Types Of Renter's Insurance Plans

There are several types of residential insurance plans and ways to customize them depending on your location, type of residence, and possessions. You should contact an insurance agent and explain your living situation and what you would like to insure. There are different plans for renters living in apartment and houses (HO-4) then people who live in or rent a condo (HO-6). You should contact two or three insurance agents to get estimates for renter’s insurance coverage that fits your needs.

Renter's Insurance For Your Possessions

Renter’s insurance policies are designed to cover you in the event of damage or loss of your personal property. Renter’s insurance will also protect you in the event you are responsible for personal injury or property damage to guests in your rental. Landlords home insurance will just cover the building from any damage not your possessions inside. It is a good idea to get renter’s insurance; it is usually a small price to pay to cover your possession in case of an emergency.

Renter's Insurance And Extra Coverage

Your renter’s insurance may also cover you in other ways; ask your insurance agent about what is offered in your plan. Some plans offer liability protection in case a visitor to your rental tries to sue you, medical payments to visitors to your rental that were injured in your rental, increased living expenses in case your rental become unlivable and you must live elsewhere, lost property when traveling, such as luggage, and many other premiums can be offered. You can usually add on more coverage if you request it but it will make your premiums go up. Renter’s insurance is a small price to pay for peace of mind during traumatic experiences that may take place in your rental.

Who Renter's Insurance Covers

Renter’s insurance usually covers those family members who live in the rental. If there are several people living in the rental or you have roommates, you should ask your insurance agent if they are covered. Sometimes you may need to list everyone living in the rental on the insurance policy. If roommates or unrelated people are not covered by one policy each person may want to consider getting individual renter’s insurance.