- Although your landlord will carry insurance coverage for the apartment building, rented house or condo, that insurance only protects the structure itself. Renter's insurance will protect your personal property -- clothing, furniture and other valuable items -- if they are damaged or stolen due to a covered event. If the building is damaged to the point where it is uninhabitable, your renter's insurance can also provide funds for temporary shelter and cover some of your living expenses.
- Companies that sell renter's insurance will offer industry-standard policies, including HO-4 policies for home and apartment renters and HO-6 policies for condominiums. Both policy types will provide coverage for a number of perils, which are events that can result in damage to your personal property. Typical covered perils include fire, lightning, smoke, volcanic eruption, bursting pipes and falling objects. The policy also provides coverage if items are stolen. While covered perils are standard in the insurance industry, your insurer may offer options regarding coverage types and amounts.
- You can choose between actual cash value (ACV) and replacement cost as your coverage type. ACV is less expensive but will only reimburse you based on the item's original value minus depreciation. Replacement cost is more expensive but reimburses you based on what it would cost to replace the item at current market prices. Both types of coverage normally require you to pay a deductible, which is the amount you pay out of your own pocket before coverage begins. The higher the deductible you select, the lower your premium will be, but the more of the cost of a covered loss you will need to absorb.
- Regardless of whether you choose ACV or replacement cost coverage, taking the time to make an inventory of your possessions can ensure you will get maximum value for any losses. Your inventory should be in writing and list the value of each item. Additional documentation like receipts and appraisals can help you justify the true value of your items. Store your inventory list in a safe place, preferably away from the insured premises, so that it is not damaged by a covered peril.
