There are many benefits to renting. The property owner mows the yard, fixes appliances, and worries about property taxes. However, securing your valuables and yourself from some legal liability remains your responsibility.

 

The good news is renter’s insurance can help provide you with some coverage, at a very reasonable price. Renter’s insurance in North Carolina helps you repair or replace personal items and can help protect you in the face of certain lawsuits. Also, your policy can also provide funds if you are displaced after a catastrophic event.

 

In general, a renter’s insurance policy provides coverage for:

 

• Personal belongings
• Additional living expenses
• Personal liability exposures

 

The building owner likely has taken steps to insure the building from damage and themselves from legal liability. Coverage on the building though, will not shield you and your possessions. Understanding how a renter’s insurance policy can help protect you will give you the tools to find the coverage right for you.

 

Personal Belongings

 

Take a moment and look around your residence. You likely have accumulated a surprising amount of belongings. Now imagine the cost to replace your possessions due to an unforeseen event such as a fire or theft. It is easy to know the cost to replace a stereo or television.

 

But, it is usually the numerous small items which break the bank if needing to be replaced. Consider how many pairs of socks you would need to purchase if they were all lost in a hurricane. Or, the number of pots, pans, and silverware needed after a fire.

 

Renter’s insurance policies help provide coverage for some specified risks, also known as perils. Most policies cover damage resulting from:

 

• Riots
• Smoke
• Explosions
• Falling objects
• Fire or lightning
• Windstorm or hail
• Vandalism or theft
• Weight of ice or snow
• Damage caused by vehicles or aircraft

 

Coverage is also provided for damage resulting from accidental water overflow along and certain sudden, accidental events. And, although not necessarily an exposure for renters in North Carolina, damage or loss from a volcanic eruption is also covered.

 

Not covered in most renter’s insurance policies:

 

• War
• Flood
• Neglect
• Intentional loss
• Nuclear hazards
• Government action

 

Depending on your location in North Carolina, coverage for wind may be excluded, unless specifically purchased with a separate deductible. Deductibles for damage caused by wind may be limited in application to hurricanes or named tropical storms.

 

Replacement Cost vs. Actual Cash Value

 

Once you have identified the belongings needing to be insured, the next step is determining how to insure them. Renter’s insurance policy offers two options:

 

• Actual cash value (or ACV)
• Replacement cost coverage

 

Less expensive than replacement cost coverage, actual cash value pays only for what lost or damaged property was worth at the time of loss. For example, a computer purchased two years ago for $1,000 brand new is worth much less today. Although you may pay nearly the same amount today to replace your computer, your insurance company will only pay what your old computer is worth right now under an actual cash value policy.

 

On the other side, replacement cost coverage will pay an amount necessary to replace the computer with the like and kind of computer, after any applicable deductible. The premium is higher for replacement cost coverage, but the potential payout after a claim could be much higher.

 

Liability Coverage

 

The second component of a renter’s insurance policy is coverage for liability exposures. If you are legally found responsible for the bodily injury of another person or damage to their property, liability coverage can step in and defend the lawsuit.

 

A lawsuit may seem to be a very remote occurrence. However, they can and do occur. Some examples include:

 

• You or a family member breaks a neighbor’s window.
• A visitor injures themselves using your exercise equipment.
• A guest trips over one of your belongings and injures

 

An amount specified on your policy limits payment for defense and settlement. In addition, certain claims are not covered such as an injury caused while committing a crime. Review your policy for details and ask your insurance agent about specific coverages and limitations.

 

Additional Living Expenses

 

Renting a home or an apartment means you have a place to live. However, in the event of a catastrophic event such as a fire or hurricane, you may be unable to return to the place you call home. In addition to replacing lost or damaged belongings, renter’s insurance may be able to assist in paying for temporary housing.

 

Addition living expense (ALE) coverage can be added to a renter’s insurance policy. ALE can pay for the cost of hotel rooms while your rental is being repaired. Further, additional living expense coverage can pay for increased food and hygienic costs incurred from not being able to return home.

 

Find the Right Coverage

 

Every renter’s needs are different. To learn more about finding the right renter’s insurance for you, contact the professionals with ProtetiveAgency.com  at (877) 739-9367. Our licensed insurance team will be happy to answer any questions you have.