The devil is said to be in the details but the fine print of renters insurance policies has some good, too. Any tenant with renters insurance should make sure their policy adequately covers them and that they fully understand the coverage they might find useful in the future.
Beyond the coverages almost all renters insurance provides - personal property, liability and loss of use - here are some things renters should keep in mind.
Limits Of Coverage
Policyholders are already familiar with the overall claim limit for their belongings. Renters choose this when they purchase their policy. What they might not realize is that there are limits within this coverage.
Some of the category limits might be familiar, such as jewelry, firearms or electronics. Others might seem obscure.
Silverware and goldware usually has its own category and claim limit of about $2,000 but not too many renters have collections of utensils that valuable. However, a lot of renters might have collections of comic books or sporting equipment that exceed their respective limits.
Considering sporting equipment such as a set of golf clubs or a bag of hockey gear, a loss in this category might exceed the typical limit of $1,500. Musical instruments are also lumped into the same category and often are valued much higher than the normal limit. A violin or a piano can easily be worth more than a $1,500 limit.
A need to expand this limit might not have existed when a tenant purchased their renters insurance policy so they should keep this limit, and others, in mind as they make purchases.
Side Gigs Are Not Covered
Anyone who runs a side business out of their home is doing so at their own risk because business materials or supplies are probably not covered by their renters insurance.
No matter what the side business is, the revenue it generates or the scale of the operation, renters insurance only covers about $1,000 of materials related to it. For renters who sew ties or knit scarfs and sell them on Etsy, the lack of a substantial amount of coverage might not matter.
Or does it? Even a very small business can have well over $1,000 in materials. A sewing machine alone might account for much of the claim limit and, depending on the material, the value of a few ties could be hundreds of dollars.
Coverages You Didn't Know Existed
It's not all bad news in the fine print - there are some little-known coverages included in renters insurance that policyholders might find beneficial.
Renters insurance usually covers the cost to remove an debris related to a loss. For example, a fire or smoke might destroy the contents of an apartment and a renter might ultimately be responsible for removing those items. Remember, the building owner or landlord's insurance company will seek the cost of debris removal from whoever caused the damage.
Policies frequently cover the cost of identity fraud, up to a certain limit. A renter might find themselves filing a claim for this if they need to hire someone to assist in recovering their identity. This isn't something you would need to use if someone stole your credit card. In that case, you would just call your card company, refute the charges and they would issue you a new card.
It's an uncommon circumstance, but a renters insurance policy would pay a tenant for any damages to permanent additions or alterations they made to their home. Most building owners or landlords would not allow a renter to make such changes. However, if they did, a renter's insurance policy would cover those.