Renters Insurance Basics
Print this pageWhat would you do if everything you owned was stolen or destroyed? What if someone was injured in your apartment and sued you? If you rent, your landlord's insurance policy likely doesn't cover your belongings - or provide you with liability insurance for persons injured in your apartment. That's why it's a smart decision to get Renters insurance, which protects both your property and your financial security.
Property coverage
Instead of protecting the physical structure of your rented dwelling, Renters insurance policies cover the cost to replace or repair its contents (i.e., your furniture, clothing, jewelry, and electronics) if they are damaged or destroyed by specific named perils. These perils include loss or damage caused by events like fire, lightening, smoke, explosion, wind, hail, riot, vandalism, vehicles, aircraft, and burglary - as well as others. In addition, you can add several other perils to your policy for an extra cost. Renters policies also usually extend a limited amount of coverage to personal property away from your residence, like luggage or property you might have while staying in a hotel.
Replacement Cost vs. Actual Cash Value
When you're choosing property coverage, one of the most important things you have to decide is whether to get replacement value or actual cash value. The one you choose determines how much you get if your belongings are stolen or damaged. Most Renters policies provide coverage for the Actual Cash Value (ACV) of property at the time it is damaged. ACV is the replacement cost minus a deduction for depreciation depending upon the age of the property. A stereo purchased 10 years ago would be almost worthless today, but if it were destroyed, you would still want to replace it. Most insurance companies offer a Replacement Cost option, when they agree to pay for the full replacement cost of your damaged property up to the amount of insurance you purchase. You should purchase the Replacement Cost option if it's available and be sure the amount of insurance you purchase is adequate to replace all of your property if it's destroyed.
Special limits
Certain items-such as jewelry, computers, cash, silverware, furs, and firearms-are covered only up to certain dollar amounts. You should ask your insurance company or agent about limits on certain types of property and purchase extra coverage if necessary.
Additional living expenses
If your home or apartment is seriously damaged, it's going to take more than a couple of days to rebuild. Living in a motel can get expensive quickly. Renters insurance will cover additional expenses for you to live elsewhere for a period of time while your home or apartment is being repaired.
Personal Liability coverage and medical payments to others
Personal Liability protects you if people are injured or their personal property is damaged while in your home or apartment. It also covers you away from home, if you are legally liable for the injury or damage to the property.
If someone slips on your stairs or if your dog bites your neighbor, you'll be covered for your legal liability and the defense costs if you're taken to court. Most basic policies provide $25,000 of Personal Liability Coverage, and will allow you to increase that amount for an additional premium.
In addition to personal liability coverage, Medical Payments coverage will protect you financially if guests are injured on your premises - even if you're not responsible for the injury. Usually Medical Payments coverage is limited to a small amount, around $1,000 for any one guest.
What's not covered
Unfortunately, Renters insurance doesn't cover everything. Among the things not included are:
- Certain types of damage to property, like damage due to floods and earthquakes, or the loss of a diamond that falls out of a ring. You may be able to buy separate coverage for these situations - talk to your insurance company or agent. For a competitive flood insurance quote call Wells Fargo Insurance at 1-877-393-5663.
- Certain types of property are limited or excluded. Examples are items, such as antiques or memorabilia, any motorized vehicles, boats, or property used in work or business.
- Certain catastrophes, such as war or nuclear hazard.
Bottom line: Renters insurance is designed for the "average tenant." If you have something unique - like your great-grandmother's wedding ring - or if you operate any type of business from your home, talk to your insurance company or agent and understand what is and isn't covered.
How much does it cost?
The cost - known as the premium - of Renters insurance varies according to where you live, the condition of your building, how much coverage you need, and what options you want to add to your policy.
It also depends on the deductible you choose. A deductible is the amount you will have to pay out of your own pocket before your insurance company will pay on a claim. For example, if you have a $500 deductible and a fire causes $2,000 in damages to your property, your insurance company would pay $1,500.
The deductible on most Renters policies is usually $250 or $500. The higher your deductible, the lower your premium.
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When you elect to schedule a call, you will leave wellsfargofinancial.com and go to the Wells Fargo Insurance web pages at wellsfargo.com. Wells Fargo Insurance offers a wide range of products from companies with high standards and excellent customer service.
Insurance products are available through Wells Fargo Insurance, Inc. (Minneapolis, Minnesota). Wells Fargo Insurance, Inc. is a licensed agency representing and compensated by the insurer based on the amount of insurance sold. Wells Fargo Insurance, Inc. is an affiliate of Wells Fargo Financial.
- Insurance is:
- Not a deposit of or guaranteed by the bank
- Not insured by the FDIC or any federal government agency