Saturday, 25 June 2016

Renters Should Protect Their Personal Belongings

Protecting your personal belongings as a Renter

Renters Should Protect Their Personal BelongingsRenters shouldn't overlook the need for insurance to protect their personal belongings. "Renters should ask themselves if they could afford to replace everything they own if it were damaged or stolen," said Leanne Snay, Executive Director of the Insurance Information Association of Michigan (IIAM). "Most likely, the answer would be no."

If the renter's building is destroyed, the insurance policy purchased by the landlord or property owner will cover the structure only. To recover for the loss of personal items, including furnishings, the renter must have purchased a policy.

However, it is estimated that less than 20 percent of all renters nationally purchase insurance to cover their belongings.

Renters Needs

There is a policy tailored to fit the needs of renters, according to the insurance industry spokesperson. The renter's policy or HO-4 covers damage to possessions which result from perils such as explosion, fire or lightning, windstorm or hail, riot or civil commotion, theft and vandalism. It is similar to the package policy which is purchased by an owner of a house.

Generally, the renter's policy reimburses losses on an actual cash value basis. This means that the insurance company will pay replacement cost, less depreciation. For an additional premium, many insurance companies offer an endorsement to the policy which will cover contents on a replacement cost basis.

Although the renter's policy covers personal belongings such as furniture, appliances, clothing and jewelry, there are limitations on the amounts of coverage for certain types of personal property which are especially susceptible to loss. 

For example, coverage for cash generally has a $200 limit. Dollar limitations for other valuables, such as jewelry, furs, firearms and silverware, vary between $1,000 and $2,500 for loss by theft. Also, most renter's policies provide limited or no coverage for home computers. For an additional premium, the consumer can purchase a policy endorsement which specifically describes each item and includes its dollar value.

Renters Policy

Renters Should Protect Their Personal BelongingsThe renter's policy usually includes several other coverages, such as additional living expenses which might be incurred if the residence is temporarily uninhabitable following a loss; personal liability insurance if someone is injured in your residence; and alterations or improvements the renter has made to the building at his/her own expense.

It may be a surprise to some people, but coverage for personal belongings stolen from your vehicle would generally be covered under a renter's policy, not the auto insurance policy. "If those golf clubs are stolen from your vehicle, coverage would be usually be provided under a renter's or homeowner's policy," Snay added.


What about coverage for that stereo your college-bound student can't bear to leave at home? While living in a dorm, most college students have limited coverage for their personal belongings extended from their parent's homeowner's or renter's policy. Check with your insurance agent or company for specific information.

The insurance spokesperson suggests taking inventory of your personal belongings to help determine how much coverage you need on your renter's policy. In the inventory, include not only a detailed description of each item, but its price and date and place of purchase. Attach sales receipts, credit card invoices or canceled checks to the inventory. Store the inventory in a safe place away from home and update the inventory on an annual basis. This information will prove helpful in the event of a future claim.