Apartment Insurance Basics
Renters insurance, also called tenant homeowners insurance or apartment insurance, is probably the single best deal in the insurance industry. Policy holders get a lot of coverage for a low monthly cost.
Many apartment complexes, and many smaller landlords, require their tenants to carry this insurance in the lease. Even if a renter is not required to purchase it, it still makes a lot of sense.
Apartment insurance contracts are most often written on a standard HO-4 policy form. The HO-4 policy form consists of four coverages packaged for a low price. The coverages include Personal Property, Additional Living Expenses (sometimes called Loss of Use), Personal Liability, and Medical Payments.
Losses involving personal property occur frequently. Personal property coverage is part of the HO-4. This covers much of the personal property of the insured anywhere in the world for things like fire, theft, and vandalism. Worldwide coverage means it covers gifts stolen from your suitcase outside of the US or your dry cleaning is stolen from the back of your car. Property coverage is on a named perils basis that means that only perils, like theft that are specifically mentioned or covered. If it is not listed, it’s not covered. Examples of uncovered loss, would include leaving a laptop behind after exiting a bus, or damage to a television by a thrown baseball. The policy also includes built in limitations of coverage for things like cash, jewelry, coin collections, and handguns. For an extra cost, some of these coverages can be extended onto the policy via endorsement.
Additional Living Expenses coverage, can pay for you to live in a hotel should your apartment become uninhabitable due to a covered peril. Fire is most often the reason why someone would file a claim for loss of use.
Personal Liability is also an important protection. It pays for lawsuit defense and judgment payment for the insured if they are sued for a covered cause of loss. This typically includes dog bites, slip and fall claims from visitors, or even a bicycle accident involving a child.
Medical Payments coverage provides a limited amount of coverage for medical expenses, for someone who is injured on the property who is not a resident. This is no fault coverage . It doesn’t matter who caused the injury. It won’t matter how it happened, or who was at fault for it. For example if someone walks into the wall and breaks their nose, and doesn’t live in the household, Medical Payments coverage can apply. Keep in mind, only the insured can file the claim.
Currently, an apartment renters insurance plan will cost around $150 or $200 per year, for $20,000 of coverage on contents, $4,000 of additional living expense, $100,000 of personal liability, and $1,000 of medical payments coverage. Better yet, if a tenant homeowners and auto plan are written with the same insurer, they will usually offer discounts on BOTH policies, from 10% to up to 40% depending on any individual company, with an average being around 25%.
Because the cost of apartment insurance is so low, even the tightest of budgets can usually find a way to manage the cost. In fact a multi-policy discount can make the rate extremely low.
If you insure your cars with the same insurer, your premiums can drop by a greater amount than a tenant’s insurance costs. This can mean that you get the renters insurance policy without paying more than you pay for the car insurance policy. That combined DECREASE in insurance cost, with an INCREASE in coverage, is what makes the renter’s one of the best deals in the insurance industry.
