Your landlord likely has homeowners’ insurance or another type of policy to cover the unit or building you’re renting. In severe weather, this insurance protects the physical building, appliances, and upgrades to the unit. So damage to pipes or the shower are the responsibility of your landlord’s insurer.
But your landlord’s insurance won’t protect your personal items. If a storm damages not only the unit but also items like your television or couch, then it’s your responsibility to replace or repair them. Additionally, consider what you’d do if the unit was no longer livable, and you had to find new living accommodations. This is where tenant insurance, also known as renters’ insurance, comes in.
This article covers how tenant insurance protects you in cases of floods, rain, wind, or other disasters. It includes coverage for your personal properties and accommodations in case your lease becomes temporarily unavailable.
Contents insurance protects your assets
Tenant insurance covers the replacement or repair of any articles you lose or damage due to a flood, rain, wind, and more. This includes events such as break-ins. If you end up losing your television, a tenant insurance policy can reimburse you to purchase a new one. Some policies may consider the depreciation of your lost items when they provide compensation.
However, this coverage usually has a limit — for example, $10,000 — which the policy covers. Anything over this limit is your own responsibility. Of course, you can always choose a higher policy limit to ensure the protection of all your goods, but this increase ultimately comes with a higher premium.
You should further be aware of category policy limits. Renters’ insurance often provides items such as jewelry, watches, or artwork with a lower limit. Thus, not all your stuff is treated equally.
Items used for business are also excluded. If you run a graphic design practice and have a laptop and camera exclusively for business use, your tenant insurance won’t cover these tools. They require their own business insurance plan or an insurance rider.
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Renters’ insurance pays for additional accommodations
Imagine. A storm floods your unit. The walls and floors are damaged, making your home unlivable. These damages require two months to repair. Where will you stay in the meantime? Short-term accommodations can often be expensive or hard to find. You may be stuck paying significantly more than your rent for a hotel or Airbnb stay.
Renters’ insurance remedies this issue by covering the costs of temporary living accommodations in instances where your unit becomes unlivable. Renters’ insurance can also provide relocation costs in case your lease becomes unusable for the long term.
Similar to the contents coverage of your policy, the additional accommodation coverage generally has a limit too. As a result, you likely can’t stay at a five-star hotel and expect your insurer to foot the bill.
Your policy may further cover expenses such as
- Restaurant meals
- Storage unit costs
- Pet boarding
- Laundry costs
Of course, these need to be reasonably priced. Your policy usually won’t cover a fancy steak dinner with foie gras and caviar. Policies also won’t cover everyday expenses, such as hygiene products or entertainment.
Tenant insurance is a valuable tool to mitigate risks when you rent. If a flood, rain, or wind threatens your home, renters’ insurance ultimately makes a disaster a tolerable experience by compensating you for repair or replacement costs for any items you’ve lost. It can pay expenses related to additional living accommodations, as well.
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