What you Should know About a Renters Insurance Policy

If you are renting a residential property to live in, you need to 

have renters insurance with liability coverage and property replacement coverage,

 not actual value coverage.  Check out this week’s blog to learn more.

Top Five Things to Know About Your Renters Insurance Policy

  1. Your Landlord Is Not Responsible To Cover Your Possessions

 In The Event Of Disaster;

  1. Renters Insurance Is Generally Very Reasonable to Buy;
  1. Renters Insurance Will Not Cover Your Home Business;
  1. Most Renters Insurance Policies Also Cover Temporary Accommodations In The Event That You Have To Move When Your Rental Property Is Damaged;
  1. Most Commercial Leases Require You To Have Renter’s Insurance.

It is extremely important to have renter’s insurance to cover your personal belongings in a home that you are living in and renting but do not own. Most people are surprised at the cost to replace all of their everyday household items in the event that disaster strikes. You accumulate many items overtime such as small appliances, pots and pans, clothing, small jewelry items, shoes, purses etc. If a fire were to strike the premises that you are renting, the landlord’s policy, with certain exceptions, would not likely cover your personal items. You could have to start over if you do not carry renter’s insurance.  

Why You Need Renter’s Insurance

As mentioned above, most of us accumulate many personal items overtime, some that are special, some that are utilitarian, and many that are necessary in our everyday lives. Rental insurance covers personal property of yours that is damaged, lost, or stolen from your rented home. It  can also cover injuries to other people that occur when they are at your rented premises. For example, let’s say that you have a party and someone is injured while there and it is determined to be your fault, whether from possibly mopping the floor or having a trip hazard on the premises. If that person sues you or brings a claim of injury against you,  your renter’s insurance policy could cover such a claim. If you do not have renters insurance, you could be personally liable to someone who is injured on your premises for something that you negligently did.

Renter’s insurance also provides reimbursement for loss and damage to possessions of yours as a result of fire or vandalism. Often times renters think that the landlord‘s insurance would cover all of their property if a fire were to occur or some other disaster. This is simply not the case.  In fact,  most leases that you will sign will specifically exclude coverage for your personal possessions. That is why renters insurance is very important when you are renting your living space. Renters insurance will help pay your costs if you suffer such a loss by reimbursing you for your lost or damaged valuables.  

However, just like homeowner’s insurance, you can buy an actual cash value policy, which we do not recommend.  Actual cash value means that if you purchased a pair of shoes for $50 and they are destroyed in a fire, you are only entitled to the actual value of those shoes which is likely what you’ve could’ve sold them for which may be as little as a dollar.  However if you purchase a policy that is called “replacement cost coverage”  for your personal possessions, you’ll be entitled to payment for whatever the cost would be to purchase those shoes at today’s value which could be higher than $50. Therefore at TheOneLawyer.com we urge you to look at your rental policy and make sure that you have replacement value. 

Sadly, an actual cash value policy has very little value if you are renting your premises and many insurance companies will pray upon renters in selling these policies knowing that the payout will be very small in the event of a significant disaster. Protect yourself and understand the language of these policies. If you are renting your premises, make sure that you have replacement value coverage.  

Do You Have to Have Renters Insurance?

Although you are not required to carry renters insurance by law like car insurance, most commercial leases require you to obtain renters insurance and provide proof of such insurance to the landlord. Even if the landlord does not require you to purchase renter’s insurance, I urge you to buy a renter’s insurance policy to protect your personal possessions. It is surprising how much we accumulate and the cost associated with replacing all of your daily utilitarian items if you had to buy everything new at one time. 

Rental policies can provide great relief in the event of a disaster.  In addition to replacing your personal items and protecting you from personal liability, most renter’s insurance policies also cover temporary accommodations in the event that you have to move when your rental property is damaged due to fire, water, or smoke and becomes uninhabitable. This can also be life-saving at times if you and your family are living in a rented premises and the premises are somehow destroyed. Your landlord would not be required to pay for you to live somewhere else while the premises were being repaired.  The cost of temporary accommodations, whether it be another rental property or a hotel, could be extremely costly as it could be a lengthy period of time before your rental is re-inhabitable. Some policies may even cover moving expenses to move any remaining property to a new rental. Discuss these issues with your agent when you are purchasing your policy

The Cost of Renters Insurance

In discussing all of these coverage options, you are probably wondering how much is all of this going to cost me?  Of course, it depends on the level of goods that you are insuring and the cost of your valuables.  However, most rental policies are in the neighborhood of $100-$250 per year on average depending on the community you live in and the amount of insurance you are covering. The national average for renters insurance is $15-$30 per month. This small investment could save you tens of thousands of dollars in the event that disaster strikes and you are forced out of your rental property and lose all of your possessions.  

Like most recommendations for purchasing insurance by TheOneLawyer.com, I highly recommend that you go with insurance company that you are familiar with. Although it may sound cliché, I usually recommend clients to go with a carrier they’ve seen commercials for on TV.   Your larger carriers are more competitive in their rates and in their policies. However, with every purchase it is imperative that you know the exclusions and the coverages that you are buying. That is why it is best to purchase from an agent where you can discuss these issues at the time of purchase instead of trying to navigate an online check the box type system.

Renter’s Insurance is not Usually Tax Deductible 

I answer this question because I have had it asked several times over the years. The short answer is no, generally speaking renter’s insurance is not tax-deductible, unless you use part of the rented space regularly and exclusively to operate a small business.  If that is the case, you may deduct a portion of your renter’s insurance on your taxes as a business expense for the limited square footage that you operate your business in on your rented premises. This would be the same on a homeowner’s policy where you can deduct part of the space as office space. Talk to your tax professional because this deduction is very limited to the percentage of square footage that you use for your business.

How Much Renters Insurance Should You Have?

Like all insurance, the amount of renter’s insurance that you should carry is contingent upon the level of value of your personal property and the area in which you live. In some areas, the cost of temporary housing can be extraordinary if you live in a high income area such as San Francisco. That is a big reason to have renter’s insurance by itself.  Also, make sure your policy is a replacement value policy and that it is high enough to cover all of your personal goods including luxury items. Many renter’s policies provide very low limits so it is important that you look at the limits of coverage that you are being offered and raise them according to the value of your personal items. 

Like a homeowner’s policy, they will assume that you have goods of everyday value and it will not cover high dollar works of art, jewelry, musical equipment, coin collections or any items or collections of high value.  Just like on a homeowner’s policy, you will need to obtain a rider on your renter’s policy to cover any high dollar goods that you have. I also highly recommend that you photograph all of your high dollar items and keep those photographs or digital records off the premises so that in the event of disaster, you have proof of loss for the insurance company.

What Does Renter’s Insurance Cover?

Renter’s insurance generally covers the same losses as a homeowner’s policy such as damage from fire and smoke. Remember that your coverage is limited to the amount you purchase and you are subject to the deductibles that you purchased. Renter’s insurance also covers you from theft whether your items are stolen from your home when it is burglarized or stolen from your car while traveling. 

Another question that arises is whether or not items in a storage unit are covered under your renter’s insurance policy. Generally speaking,  if they are stored off property they would not be covered under your renter’s policy. However, some policies may cover personal items stored offsite or you can buy additional coverage through the storage facility for those items. If you are a person who maintains a storage unit to store your personal items of any value,  you definitely need to talk to the agent when you are purchasing your renter’s insurance about whether you need a separate policy, which you likely do, for the storage unit. Many storage facilities also offer supplemental insurance for your unit and you may want to check with them as well.

Does Renter’s Insurance Cover My Car?

Although a renter’s policy will often cover belongings that are personal that are stolen from your car, it does not cover your vehicle itself. Most people understand that they need vehicle insurance to cover damage to the car.   Sometimes there is confusion is this area because items that are stolen out of the car can be covered on a renter’s policy, but damage to the car itself would be covered under the vehicle policy.

Does Renter’s Insurance Cover Me If My Dog Bites Someone?

We have often been faced with a situation where a client contacts our office and they have been bitten by a dog that is owned by someone who is renting a property.   Many renter’s insurance policies cover some breeds but do exclude certain breeds. Some will not provide any coverage for high-risk breeds. If you are renting a property you need to make sure that the coverage you are buying will cover any bites that may be inflicted by any pet  that you have. If you have a pet that is excluded by certain carriers, you will need to shop around to make sure the coverage you are purchasing covers you, your pets, and all of your valuables. You do not want to find out what type of coverage you have at the time you need to make a claim. It is also important to note that in Nevada,  the landlord is generally not liable for any injuries inflicted by your pets on another person

Does Renters Insurance Cover Me If My Home Is Flooded?

Just like homeowner’s policies, most rental insurance policies do not cover flood damage. If you live in an area that is prone to floods you need to discuss flood insurance with your agent at the time you are purchasing your rental policy. If a leak within the property causes damage to your personal items you will likely be covered. However, if floodwaters come from an outside source you will not likely be covered for your personal items if you do not purchase flood coverage separately. Many carriers offer this coverage with your renter’s policy. If you live in a flood prone area be sure to talk to the agent about adding flood damage coverage to your renter’s policy.

Where Can I Buy Renters Insurance?

Renter’s policy coverage is extremely common and  most major carriers offer rental policies. You usually can get a discount on your renter’s policy, just like a  homeowners, if you purchase your auto and renter’s policy from the same carrier. It is important to know all of your insurance needs when you go to talk to an agent. Many people buy coverage online and don’t understand all the exclusions and limitations on most standard insurance policies. At TheOneLawyer.com, I  urge you to buy your insurance from a licensed, reputable agent and discuss your needs with them to make sure you are getting the coverages that you need.

If you were a loved one has any question about insurance or has been injured in any type of accident please call the offices of TheOneLawyer.com today. We are a boutique law firm providing experienced and personal representation to injured clients.  At the Law Offices of Laura Payne-Hunt, TheOneLawyer.com we provide professional and personal service to each and every one of our clients on various legal matters and have over 15 years of experience in reviewing insurance policies and in Nevada insurance law.   If you have a question regarding any type of personal injury or paying your medical bills from an accident, please don’t hesitate to call the offices of TheOneLawyer.com and speak directly to attorney Laura Marie Payne-Hunt, Esq. a Henderson Injury Attorney for over 15 years.  Laura is recognized as one of Nevada’s Top 100 Lawyers.  She has the experience and knowledge to obtain the maximum settlement you deserve.  Please call our office if you or a loved one is injured.  We can make sure that you receive the care you need and deserve and advise on how to preserve evidence.  

At our office, we are experienced in helping injured victims get the compensation they are entitled to.  Insurance companies never have the best interest of the injured person at the top of their priorities.  They want to pay as little on every claim as possible.  Having worked for an insurance company as an attorney for 9 years before opening my boutique law firm specializing in helping injured people, I have reviewed thousands of auto accident claims and policy provisions.   

At the Henderson and Las Vegas Accident injury law offices of TheOneLaweyer.com, Laura Marie Payne-Hunt and her staff are here to help you and your family in the event that accidents and tragedies occur.  For any of your legal needs, do not hesitate to contact our Henderson and Las Vegas Accident injury offices.  TheOneLawyer.com is a boutique, family owned law firm that specializes in helping injured people and the community of Las Vegas and Henderson Nevada with legal issues involving auto accidents, wrongful deaths, slip and falls, truck accidents, injuries to children, bicycle accidents, dog bites, product liability claims, and all types of injury claims.  Please do not hesitate to call us anytime you have a legal question or you or a loved one has sustained an injury at 702-450-(HUNT) 4868 and text 24/7 at 702-600-0032.