Burns Insurance Group Newsletter JANUARY 2014 | Page 7

RENTERS INSURANCE: Frequently Asked Questions
I’m forever surprised by the fact that
many renters don’t carry insurance to
protect against the destruction or loss
of their personal possessions: While
the majority of American homeowners
are insured, the Insurance Information
Institute recently conducted a survey that
showed only about 30 percent of renters
had renters insurance!
This means nearly 70 percent of renters
are without coverage should fires, thefts
or other unfortunate events damage or
ruin their possessions. Yet, according to
the latest data, the National Association
of Insurance Commissioners estimates
the average renter’s policy costs between
$15 and $30 a month, depending on the
location, size and contents of the rented
unit. Compared to the amount it would
probably cost to replace everything you
own if the unexpected happened, that’s a
small price to pay for the peace of mind
insurance can provide.
Renters are made up of a wide variety
of people, from college students living
in their first off-campus apartments to
retired couples downsizing to a rented
condo. And, since many renters aren’t
clear on just what renters insurance is
all about, I’ve collected some of the most
frequently asked—and misunderstood—
questions that I regularly answer.
Q: What does renters insurance usually cover?
A: A renters insurance policy typicaly
includes a few types of coverage:
personal property protection, which
helps protect your belongings in case
of a covered loss; liability protection,
which can help protect you financially in
case someone is injured in your home
and files a lawsuit; reimbursed living
expenses, which helps cover additional

costs of staying somewhere else after a
covered loss renders your home uninhabitable; and guest medical protection,
which can help pay medical expenses for
someone injured at your home.
Q: Doesn’t my landlord’s insurance
policy protect my stuff?
A: No. Landlords typically carry insurance
to cover structural damage to the actual
building you’re living in, such as your
apartment or the house you’re renting,
but this type of insurance doesn’t extend
to protecting your personal possessions.
And, while some landlord insurance protects against limited damages caused by
tenants, you could still be held liable for
damages in certain circumstances, for
example if you caused a fire or plumbing accident. In these situations, renters
insurance may help give you the protection you need.
Q: If I don’t own many expensive
possessions, why do I need renters
insurance?
A: You might not think your possessions are worth that much, but when you
consider replacing all of the electronics,
clothing, furniture and appliances you
own, the costs quickly add up. Even a
small fire, for example, can easily leave
you with a price tag in the thousands of
dollars to replace damaged or lost items.
In contrast, for approximately the cost
of a pair of movie tickets each month,
a renter’s insurance policy can give you
priceless peace of mind.
Q: What is personal liability insurance,
and is it included?
A: Liability coverage helps protect you
if someone is injured at your home
and sues you. Many renters insurance

policies include personal liability
coverage, but you should check your
own policy to make sure what coverage
is included. If you’re concerned about the
amount of your coverage, check the limits
of your particular policy, and discuss with
your agent if you feel further coverage is
needed.
Q: Is my computer covered?
A: Your computer is one of your personal
possessions, so if you have a renters
insurance policy with personal property
coverage, that protection would likely
extend to your computer. But, there are
a couple of things to take into account
when you’re trying to figure out whether
your computer is protected. The first
is the limit, or the maximum amount of
money your insurance company will pay
in the event of a covered loss. If your
computer is worth more money than the
limit on your policy, you may want to
consider purchasing additional coverage.
Another thing to take into consideration
is whether your policy offers replacement
cost coverage, which will pay enough for
you to purchase a new computer of the
same kind, or actual cash value, which
reimburses you for the amount of money
you might reasonably expect to receive if
you sold the item today.
After a few questions like the ones above,
I see many renters become very interested in protecting themselves and their
possessions.