Understanding some of the limits of renters insurance

When a person follows up the important decision to rent an apartment, condominium or home with an appointment with an insurance agent to discuss procuring renters insurance, they are to be commended for both their foresight and their vigilance.

Indeed, the decision to secure renters coverage means not only will their personal property be protected in the event of an unforeseeable occurrence like a burglary or a catastrophic event like a fire, but that they will be protected in the event someone is injured while in their new residence.    

It’s important to understand, however, that as much as renters insurance can grant a person peace of mind, it’s not without its limits. Indeed, experts have identified a few factors that tenants should consider when purchasing this coverage.

Home businesses

Thanks to the proliferation of internet-related commerce over the last decade, thousands of people have taken the plunge and developed successful home businesses. Experts indicate, however, that those who run these sorts of operations from the comfort of their home rental should know that most renters policies only cover a small amount of materials in the event of a loss, typically $1,000.

While this might seem like more than enough, consider all of your costs. For example, someone who earns modest profits making novelty potholders may have to replace everything from fabric and accessories to a sewing machine and other equipment, which may cost well over $1,000.

Coverage restrictions  

When a person sits down with an insurance agent, they’ll typically assess how much coverage they would likely need under their renters policy, such that they’ll be well aware of how much money they can anticipate receiving in the event of a loss.

What they might not be aware of, however, is that there are more than likely certain category limits within their coverage.

For example, a person’s policy might dictate that things like sporting equipment and musical instruments are subject to a claim limit of $1,500 despite the policy covering $30,000 in losses. Again, while this might seem sufficient, consider that the value of a new set of golf clubs or a prized tuba will typically cost much more than this.

Given this reality, experts indicate that tenants might wish to secure additional coverage for high value items.

Please remember that in the event an insurance company is refusing to honor its obligations under the terms of a renters policy — payment delays, claim denials, etc. — that you can speak with a skilled legal professional to learn more about your rights and options.

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