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Exploring Your Coverage Options in Renter’s Insurance

As a renter, a renter’s insurance policy isn’t just a backstop to unforeseen circumstances – it’s a key element to your personal sense of peace. Regardless of whether this is your first time renting a home or apartment or you’re just reviewing your current policy, familiarising yourself with all of the coverage options available to you can help to protect your property, your liability, and your finances overall.

What Does Renter’s Insurance Cover?

Renter’s insurance consists of three broad safeguards – personal property, liability and additional living expenses – all intended to cover you in the event of a mishap or disaster. Here’s a line-by-line breakdown of how each of these types of coverage works.

Personal Property Coverage

This part of your renter’s insurance policy covers the replacement cost of your possessions if they’re damaged or destroyed by a covered event such as theft, fire or certain kinds of water damage. When buying this coverage, you’ll need to select between replacement cost policies, which cover the cost to replace your item, and actual cash value policies which factor in wear and tear of your item through depreciation.

Liability Protection

Liability insurance is a must if someone is injured staying with you at your rental, or if you injure someone else accidentally, for instance by having a guest trip over a rug on your living room floor or by causing an accident with a golf cart that damages a neighbour’s valuables. It can cover a person’s legal fees and any damages they might be legally obliged to pay.

Additional Living Expenses (ALE)

If your rental suffers damage from a covered peril such as a fire or severe storm, ALE kicks in and can help defray expenses such as hotel rooms or rentals for the time period while your rental is uninhabitable. The coverage can be a lifesaver when disaster strikes your rental and forces you to find alternative living arrangements. Ensure that the disaster doesn’t derail your life any more than it already has.

Choosing the Right Deductible

Your deductible is the amount you pay toward a claim before your renter’s insurance starts to pay. For example, if you have a $1,000 deductible and file a claim for $5,000 worth of theft damage, your insurance company will cover $4,000 and you’ll cover $1,000. It’s a great way to reduce your monthly premium payments, but be sure to choose a deductible that you’re able to pay in the event of a claim. Choosing the right level of deductible can help you to balance renter’s insurance coverage with an affordable premium payment.

Special Considerations for Valuables

If you own jewellery, fine art, collectibles and/or high-end electronics, standard renter’s insurance won’t likely be enough to cover the cost. You can augment your coverage with the purchase of scheduled personal property coverage, which acts like an endorsement to your policy and provides extra coverage for your most valuable items. Generally, the insurance company requires an appraisal or a receipt for the items, thus making absolutely sure these items are covered 100 per cent beyond the regular limit.

Discounts and Savings on Renter’s Insurance

Because renters insurance often comes with appealing discounts, many insurance providers offer heavy discounts for purchases. Common discounts include:

Bundling discounts for combining your renter’s insurance with other policies such as auto insurance

Security discounts for having burglar alarm, smoke detector, or other security devices in your rental.

Automatic payment or paperless billing discounts, especially with more than one company, too – low-hanging fruit when it comes to saving money and upgrading your policy.

Policy Limitations and Exclusions

Renter’s insurance has standard coverages, but beware of exclusions and limits to your policy – most don’t cover damage from flood, earthquake, or other natural disasters unless you add riders. Understanding your policy and the exclusions your agent is pointing out can help you avoid unforeseen damage that you thought was covered.

How to Choose an Insurance Provider

Finding the right insurer is as important as finding the right policy: look for companies with solid financial ratings, good customer reviews and a willingness and ability to pay claims promptly. Also, get quotes from several companies so you can compare apples with apples to find who best serves your needs at the most competitive price.

Reviewing and Updating Your Policy Regularly

Your rent and the things you bring into your rental household will change, so your renter’s policy should, too. Review your policy every year to make sure it is still serving you. This is especially important after significant life moments in which your risks and assets are altered (for example, after getting married or having children). It might be time to make some tweaks to keep your coverage effectively protecting all your people and your possessions.

Through slow and careful study of your renter’s insurance options, you’ll find yourself better prepared to handle whatever comes your way, without running up a bill at the same time. With your renter’s insurance secured before moving in, you can enjoy your rental knowing that you’re protected.

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