What Is Renters Insurance Or “Tenant Cover”, And Why Would I Need This?

Renters insurance is a type of home insurance that protects the holder against accidents, damages, and losses that occur in a rented residence. Renters insurance provides coverage both for the insured’s belongings and for liability that may result from an accident in the insured’s home. Many policies cover replacement cost, meaning that the insured will receive the money necessary to purchase a new item that is equivalent to the damaged one instead of a portion of that cost adjusted for depreciation.

How Protected Are You as a Renter?
If you are a renter residing in California, by law the building owner is required to maintain insurance on the dwelling he or she rents. All this means is that the house or apartment you rent, the building itself, is insured by the owner, and should something happen to this structure as the result of fire, water damage, etc, the building owner is entitled to file a claim. However, the landlord's insurance does not protect you as a renter. If this same fire or water damage should ruin your sofa, clothes or other personal items, you are not protected against the loss of these items unless you buy a California Renter's Insurance policy. Moreover, if someone becomes injured while on the premises you rent, you could potentially be held liable for any medical and hospital expenses.

What is Covered in a California Renter's Insurance Policy?
Renter's insurance typically covers loss or damaged caused by:
•Fire
•Smoke
•Theft
•Vandalism
•Windstorm or hail
•Lighting
•Explosion
•Falling objects
•Weight of snow, ice or sleet
•Water (caused by plumbing failure, appliance failure, fire sprinklers or other accidental discharges of water)
•Electrical surges

It also covers:
Injuries that others sustain while at your home (including medical expenses and any resulting lawsuits)
Damage that you cause to other people's property (ex: you break a neighbor's window while playing ball)
Housing costs. If your rental unit is damaged and you need to live elsewhere while it's being repaired, your renters insurance will pay for your additional living expenses

Important Note:
Renter's insurance protects your belongins even when you're away from home. So, if your laptop gets stolen from your car or your bike gets taken from the rack at work, your renter's insurance will pay to replace them.

Additional Coverage Options:
Need more protection than the basic renter's insurance policy provides? You can add additional riders for:

•High Value Item Coverage - a good idea if you own jewelry, artwork, antiques, collectibles or firearms with a total value that exceeds your policy's maximum pay out for such items.
•Earthquake or Flood Coverage - a must-have if you live in an area prone to such conditions. A standard renter's insurance policy does not include coverage for a flood or earthquake.
•Sewer and Drain Back Up Coverage - back-ups happen more often than you would think, and they cause a lot of damage when they do.
•Replacement Value Coverage - If you make a claim, you'll be reimbursed for the full replacement cost of your items - rather than the depreciated cash value of your items.
•Home Business Coverage - Most insurance policies offer very little coverage for business equipment. If you work from home, consider adding a home business rider to boost your equipment and liability coverage.
•Business Merchandise Coverage - If you store your business' inventory at home, an additional rider will be needed to insure it properly.